UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________

FORM 10-Q

____________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 24, 2022~~April 1, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 001-38000

____________________________

JELD-WEN Holding, Inc.

(Exact name of registrant as specified in its charter)

____________________________


Delaware						93-1273278
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

2645 Silver Crescent Drive

Charlotte, North Carolina 28273

(Address of principal executive offices, zip code)

(704) 378-5700

(Registrant’s telephone number, including area code)

____________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock (par value $0.01 per share)

JELD

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The registrant had ~~84,337,757~~84,971,801 shares of Common Stock, par value $0.01 per share, outstanding as of ~~October 27, 2022.~~May 4, 2023.

JELD-WEN HOLDING, Inc.

- Table of Contents –


		Page No.
Part I - Financial Information

Item 1.	Unaudited Financial Statements
	Consolidated Statements of Operations	68
	Consolidated Statements of Comprehensive Income (Loss)	79
	Consolidated Balance Sheets	810
	Consolidated Statements of Equity	911
	Consolidated Statements of Cash Flows	1112
	Notes to Unaudited Consolidated Financial Statements	1213
	Note 1. Description of Company and Summary of Significant Accounting Policies	13
	Note 2. Accounts Receivable	14
	Note 3. Inventories	14
	Note 4. Property and Equipment, Net	15
	Note 5. Goodwill	15
	Note 6. Intangible Assets, Net	15
	Note 7. Accrued Expenses and Other Current Liabilities	16
	Note 8. Warranty Liability	16
	Note 9. Long-Term Debt	17
	Note 10. Income Taxes	19
	Note 11. Segment Information	19
	Note 12. Capital Stock	21
	Note 13. Earnings Per Share	22
	Note 14. Stock Compensation	22
	Note 15. Restructuring and Asset Related Charges	22
	Note 16. Held for Sale	24
	Note 17. Other Income, Net	24
	Note 18 Derivative Financial Instruments	24
	Note 19. Fair Value of Financial Instruments	25
	Note 20. Commitments and Contingencies	26
	Note 21. Supplemental Cash Flow Information	31
	Note 22. Subsequent Events	32
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3433
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4340
Item 4.	Controls and Procedures	4340

Part II - Other Information

Item 1.	Legal Proceedings	4441
Item 1A.	Risk Factors	4441
~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	44
Item 5.	Other Information	4441
Item 6.	Exhibits	4541

	Signature	4642

Glossary of Terms

When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below:





Form 10-K			Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022

ABL Facility			Our $500 million asset-based loan revolving credit facility, dated as of October 15, 2014 and as amended from time to time, with JWI (as hereinafter defined) and JELD-WEN of Canada, Ltd., as borrowers, the guarantors party thereto, a syndicate of lenders, and Wells Fargo Bank, N.A., as administrative agent

Adjusted EBITDA			A supplemental non-GAAP financial measure of operating performance not based on any standardized methodology prescribed by GAAP that we define as net income (loss), adjusted for the following items: (income) loss from discontinued operations, net of tax; ~~equity earnings of non-consolidated entities;~~ income tax expense (benefit) ~~expense;~~; depreciation and amortization; interest expense, net; ~~impairment~~ and certain special items consisting of non-recurring legal and professional expenses and settlements; restructuring and asset related charges; ~~gain on previously held shares of equity investment; (gain) loss on sale of property~~facility closure, consolidation, and ~~equipment;~~other related costs and adjustments; M&A related costs; share-based compensation expense; non-cash foreign exchange transaction/translation (income) loss; and other ~~non-cash items; other items; and costs related to debt restructuring and debt refinancing~~special items.


ASC			Accounting Standards Codification
ASU			Accounting Standards Update
AUD			Australian Dollar
Australia Senior Secured Credit Facility			Our senior secured credit facility, dated as of October 6, 2015 and as amended from time to time, with certain of our Australian subsidiaries, as borrowers, and Australia and New Zealand Banking Group Limited, as lender

BBSY			Bank Bill Swap Bid Rate


CAP			Cleanup Action Plan
CARES Act			Coronavirus Aid, Relief, and Economic Security Act enacted on March 27, 2020
CEO			Chief Executive Officer
CFO			Chief Financial Officer
Charter			Amended and Restated Certificate of Incorporation of JELD-WEN Holding, Inc.



CMI			JWI d/b/a CraftMaster Manufacturing, Inc.
COA			Consent Order and Agreement
CODM			Chief Operating Decision Maker, which is our Chief Executive Officer

Common Stock			The 900,000,000 shares of common stock, par value $0.01 per share, authorized under our Charter
Core Revenues			Revenue excluding the impact of foreign exchange, divestitures, and acquisitions completed in the last twelve months
Corporate Credit Facilities			Collectively, our ABL Facility and our Term Loan Facility
COVID-19			A novel strain of the 2019-nCov coronavirus
Credit Facilities			Collectively, our Corporate Credit Facilities and our Australia Senior Secured Credit Facility as well as other acquired term loans and revolving credit facilities


DKK			Danish Krone



ERP			Enterprise Resource Planning




Exchange Act			Securities Exchange Act of 1934, as amended
FASB			Financial Accounting Standards Board


GAAP			Generally Accepted Accounting Principles in the United States

GHGs			Greenhouse Gases
GILTI			Global Intangible Low-Taxed Income




JELD-WEN			JELD-WEN Holding, Inc., together with its consolidated subsidiaries where the context requires
~~JEM~~			~~JELD-WEN Excellence Model~~
JWA			JELD-WEN of Australia Pty. Ltd.

JWI			JELD-WEN, Inc., a Delaware corporation



LIBOR			London Interbank Offered Rate

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M&A			Mergers and acquisitions


MD&A			Management’s Discussion and Analysis of Financial Condition and Results of Operations


Onex			Onex Partners III LP and certain affiliates
PaDEP			Pennsylvania Department of Environmental Protection
PLP			Potential Liability Party
Preferred Stock			90,000,000 shares of Preferred Stock, par value $0.01 per share, authorized under our Charter
PSU			Performance Stock Unit
R&R			Repair and Remodel


RSU			Restricted Stock Unit

SEC			U.S. Securities and Exchange Commission
Securities Act			Securities Act of 1933, as amended
Senior Notes			$800.0 million of unsecured notes issued in December 2017 in a private placement in two tranches: $400.0 million bearing interest at 4.625% and maturing in December 2025 and $400.0 million bearing interest at 4.875% and maturing in December 2027
Senior Secured Notes			$250.0 million of senior secured notes issued in May 2020 in a private placement bearing interest at 6.25% and maturing in May 2025

SOFR			Secured Overnight Financing Rate
SG&A			Selling, general, and administrative expenses


Tax Act			Tax Cuts and Jobs Act
Term Loan Facility			Our term loan facility, dated as of October 15, 2014, and as amended from time to time with JWI, as borrower, the guarantors party thereto, a syndicate of lenders, and Bank of America, N.A., as administrative agent
~~Common Stock~~			~~900,000,000 shares of common stock, with a par value of $0.01 per share~~


U.S.			United States of America
VPI			JWI d/b/a VPI Quality Windows, Inc.
~~WADOE~~			~~Washington State Department of Ecology~~
Working Capital			Accounts receivable plus inventory less accounts payable

CERTAIN TRADEMARKS, TRADE NAMES, AND SERVICE MARKS

This report includes trademarks, trade names, and service marks owned by us. Our U.S. window and door trademarks include JELD-WEN®, AuraLast®, MiraTEC®, Extira®, LaCANTINA®, MMI Door®, KaronaTM, ImpactGard®, JW®, Aurora®, IWP®, True BLU®, ABSTM, Siteline®, National Door®, Low-Friction Glider®, Hydrolock®, ~~and~~ VPITM, AURALINE®, FINISHIELD®, MILLENIUM®,TRUFIT®, EPICVUE®, and EVELIN®. Our trademarks are either registered or have been used as common law trademarks by us. The trademarks we use outside the U.S. include the Stegbar®, Regency®, William Russell Doors®, Airlite®, Trend®, The Perfect FitTM, Aneeta®, Breezway®, KolderTM , Corinthian® and A&L Windows® marks in ~~Australia,~~Australasia, and Swedoor®, Dooria®, DANA®, MattioviTM, Zargag® , Alupan®, and Domoferm® marks in Europe. ENERGY STAR® is a registered trademark of the U.S. Environmental Protection Agency. This report contains additional trademarks, trade names, and service marks of others, which are, to our knowledge, the property of their respective owners. Solely for convenience, trademarks, trade names, and service marks referred to in this report appear without the ®, ™ or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names, and service marks. We do not intend our use of other parties’ trademarks, trade names, or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

PART I - FINANCIAL INFORMATION

FORWARD-LOOKING STATEMENTS

In addition to historical information, this Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the federal Securities Act and Section 21E of the Exchange Act, which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts, included in this Form 10-Q are forward-looking statements. Forward-looking statements are generally identified by our use of forward-looking terminology, including the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek,” or “should,” and, in each case, their negative or other various orcomparable terminology. In particular, statements about the markets in which we operate, including growth of our various markets, and our expectations, beliefs, plans, strategies, objectives, prospects, assumptions, or future events or performance under Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 1- Business are forward-looking statements. In addition, statements regarding the potential outcome and impact of pending litigation are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed under the headings Item 1A- Risk Factors in our Form 10-K and Item 1A – Risk Factors and Item 2- Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-Q may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include:

•negative trends in overall business, financial market and economic conditions, and/or activity levels in our end markets;

•our highly competitive business environment;

•failure to timely identify or effectively respond to consumer needs, expectations, or trends;

•failure to maintain the performance, reliability, quality, and service standards required by our customers;

•failure to successfully implement our strategic initiatives, including our productivity and global footprint rationalization initiatives and strategic business review;

•the ongoing conflict between Russia and Ukraine;

•acquisitions, divestitures, or investments in other businesses that may not be successful;

•adverse outcome of pending or future litigation;

•declines in our relationships with and/or consolidation of our key customers;

•increases in interest rates and reduced availability of financing for the purchase of new homes and home construction and improvements;

•fluctuations in the prices of raw materials used to manufacture our products;

•delays or interruptions in the delivery of raw materials or finished goods;

•failure to retain and recruit executives, managers, and employees;

•seasonal business with varying revenue and profit;

•changes in weather patterns and related extreme weather conditions;

•political, regulatory, economic, and other risks, including the impact of political conflict on the global economy and the impact pandemics, including the COVID-19 pandemic, that arise from operating a multinational business;

•exchange rate fluctuations;

•disruptions in our operations due to natural disasters or acts of war;

•manufacturing realignments and cost savings programs resulting in a decrease in short-term earnings;

•security breaches and other cybersecurity incidents;

•increases in labor costs, potential labor disputes, and work stoppages at our facilities;

•changes in building codes that could increase the cost of our products or lower the demand for our windows and doors;

•compliance costs and liabilities under environmental, health, and safety laws and regulations;

•compliance costs with respect to legislative and regulatory proposals to restrict emission of GHGs;

•lack of transparency, threat of fraud, public sector corruption, and other forms of criminal activity involving government officials;

•product liability claims, product recalls, or warranty claims;

•inability to protect our intellectual property;

•pension plan obligations;

•availability and cost of credit;

•our current level of indebtedness and the effect of restrictive covenants under our existing or future indebtedness including our Credit Facilities, Senior Secured Notes, and Senior Notes; and

•other risks and uncertainties, including those listed under Item 1A- Risk Factors in our Form 10-K and Item 1A- Risk Factors in this Form 10-Q.

Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. Any forward-looking statement in this Form 10-Q speaks only as of the date of this Form 10-Q. We do not undertake any obligation to update any of the forward-looking statements, except as required by law. We do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

The forward-looking statements contained in this Form 10-Q are not guarantees of future performance and our actual results of operations, financial condition, and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements contained herein. In addition, even if our results of operations, financial condition, and liquidity, and events in the industry in which we operate, are consistent with the forward-looking statements contained in this Form 10-Q, they may not be predictive of results or developments in future periods.

Unless the context requires otherwise, references in this Form 10-Q to “we,” “us,” “our,” “the Company,” or “JELD-WEN” mean JELD-WEN Holding, Inc., together with our consolidated subsidiaries where the context requires, including our wholly owned subsidiary JWI.

Item 1 ~~-Unaudited~~- Unaudited Financial Statements

JELD-WEN HOLDING, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

Three Months Ended Nine Months Ended
(amounts in thousands, except share and per share data) September 24, 2022 September 25, 2021 September 24, 2022 September 25, 2021
Net revenues $ 1,295,810 $ 1,146,585 $ 3,797,800 $ 3,484,783
Cost of sales 1,045,031 918,513 3,097,558 2,728,855
Gross margin 250,779 228,072 700,242 755,928
Selling, general and administrative 192,394 173,774 565,877 554,019
Goodwill impairment 54,885 — 54,885 —
Impairment and restructuring charges 6,579 576 11,876 2,648
Operating income (loss) (3,079) 53,722 67,604 199,261
Interest expense, net 21,138 19,377 59,714 56,692
Other income (7,690) (3,251) (35,914) (13,940)
Income (loss) before taxes (16,527) 37,596 43,804 156,509
Income tax expense (benefit) 16,665 (2,946) 31,698 29,772
Net income (loss) $ (33,192) $ 40,542 $ 12,106 $ 126,737
Weighted average common shares outstanding:
Basic 84,519,095 95,783,839 87,121,448 98,562,479
Diluted 84,519,095 97,823,658 88,016,849 100,631,125
Net income (loss) per share
Basic $ (0.39) $ 0.42 $ 0.14 $ 1.29
Diluted $ (0.39) $ 0.41 $ 0.14 $ 1.26


	Three Months Ended

(amounts in thousands, except share and per share data)	April 1, 2023		March 26, 2022
Net revenues	$	1,222,617	$	1,171,022
Cost of sales	990,549		967,724
Gross margin	232,068		203,298


Selling, general and administrative	185,507		192,996

Restructuring and asset related charges (Note 15)	9,266		1
Operating income	37,295		10,301


Interest expense, net	21,221		18,354



Other income, net (Note 17)	(5,272)		(7,337)
Income (loss) before taxes	21,346		(716)
Income tax (benefit) (Note 10)	6,212		(188)



Net income (loss)	$	15,134	$	(528)



Weighted average common shares outstanding (Note 13):
Basic	84,598,945		89,802,974
Diluted	85,149,088		89,802,974
Net income (loss) per share
Basic	$	0.18	$	(0.01)
Diluted	$	0.18	$	(0.01)

The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.

JELD-WEN HOLDING, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)

Three Months Ended Nine Months Ended
(amounts in thousands) September 24, 2022 September 25, 2021 September 24, 2022 September 25, 2021
Net income (loss) $ (33,192) $ 40,542 $ 12,106 $ 126,737
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax expense (benefit) of $95, ($2,000), $197, and ($1,987), respectively (55,196) (26,895) (121,457) (54,600)
Interest rate hedge adjustments, net of tax expense of $803, $22, $3,900, and $508, respectively 2,341 64 11,464 1,502
Defined benefit pension plans, net of tax expense of $384, $550, $926, and $2,033, respectively 583 2,003 1,494 5,528
Total other comprehensive income (loss), net of tax (52,272) (24,828) (108,499) (47,570)
Comprehensive (loss) income $ (85,464) $ 15,714 $ (96,393) $ 79,167



	Three Months Ended
(amounts in thousands)	April 1, 2023		March 26, 2022
Net income (loss)	$	15,134	$	(528)

Other comprehensive income, net of tax:
Foreign currency translation adjustments, net of tax expense (benefit) of $580, and $(10), respectively	8,173		(4,033)
Interest rate hedge adjustments, net of tax (benefit) expense of $(1,049) and $2,304, respectively	(3,085)		6,786
Defined benefit pension plans, net of tax expense of $23 and $150, respectively	62		401
Total other comprehensive income, net of tax	5,150		3,154
Comprehensive income	$	20,284	$	2,626

The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.

JELD-WEN HOLDING, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)


(amounts in thousands, except share and per share data)	(amounts in thousands, except share and per share data)	September 24, 2022		December 31, 2021		(amounts in thousands, except share and per share data)	April 1, 2023		December 31, 2022
ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	199,809	$	395,596	Cash and cash equivalents	$	202,552	$	219,405
Restricted cash	Restricted cash	1,339		1,294		Restricted cash	1,439		1,463
Accounts receivable, net		675,125		552,041
Inventories		725,859		615,971
Accounts receivable, net (Note 2)						Accounts receivable, net (Note 2)	702,406		603,748
Inventories (Note 3)						Inventories (Note 3)	637,803		666,455
Other current assets	Other current assets	108,405		55,531		Other current assets	80,313		78,787
Assets held for sale		124,590		119,424
Assets held for sale (Note 16)						Assets held for sale (Note 16)	128,534		125,748

Total current assets	Total current assets	1,835,127		1,739,857		Total current assets	1,753,047		1,695,606
Property and equipment, net		746,108		798,804
Property and equipment, net (Note 4)						Property and equipment, net (Note 4)	758,142		762,486
Deferred tax assets	Deferred tax assets	181,928		204,232		Deferred tax assets	200,830		195,180
Goodwill		443,294		545,213
Intangible assets, net		193,855		222,181
Goodwill (Note 5)						Goodwill (Note 5)	463,603		460,505
Intangible assets, net (Note 6)						Intangible assets, net (Note 6)	186,731		192,105
Operating lease assets, net	Operating lease assets, net	183,881		201,781		Operating lease assets, net	166,887		167,880
Other assets	Other assets	30,731		26,603		Other assets	31,282		27,599

Total assets	Total assets	$	3,614,924	$	3,738,671	Total assets	$	3,560,522	$	3,501,361
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities	Current liabilities					Current liabilities
Accounts payable	Accounts payable	$	386,392	$	418,774	Accounts payable	$	348,410	$	320,682
Accrued payroll and benefits	Accrued payroll and benefits	155,756		135,989		Accrued payroll and benefits	131,846		133,637
Accrued expenses and other current liabilities		319,648		289,676
Current maturities of long-term debt		40,086		38,561
Liabilities held for sale		7,774		5,868
Accrued expenses and other current liabilities (Note 7)						Accrued expenses and other current liabilities (Note 7)	294,515		291,876
Current maturities of long-term debt (Note 9)						Current maturities of long-term debt (Note 9)	29,109		34,391
Liabilities held for sale (Note 16)						Liabilities held for sale (Note 16)	6,687		6,040

Total current liabilities	Total current liabilities	909,656		888,868		Total current liabilities	810,567		786,626
Long-term debt		1,774,273		1,667,696
Long-term debt (Note 9)						Long-term debt (Note 9)	1,721,241		1,713,238
Unfunded pension liability	Unfunded pension liability	52,321		61,438		Unfunded pension liability	38,315		35,505
Operating lease liability	Operating lease liability	150,155		166,318		Operating lease liability	133,046		135,822
Deferred credits and other liabilities	Deferred credits and other liabilities	95,303		102,879		Deferred credits and other liabilities	100,898		97,898
Deferred tax liabilities	Deferred tax liabilities	8,120		9,254		Deferred tax liabilities	8,696		8,724

Total liabilities	Total liabilities	2,989,828		2,896,453		Total liabilities	2,812,763		2,777,813
Commitments and contingencies (Note 20)
Commitments and contingencies (Note 20)						Commitments and contingencies (Note 20)

Shareholders’ equity	Shareholders’ equity					Shareholders’ equity
Preferred Stock, par value $0.01 per share, 90,000,000 shares authorized; no shares issued and outstanding	Preferred Stock, par value $0.01 per share, 90,000,000 shares authorized; no shares issued and outstanding	—		—		Preferred Stock, par value $0.01 per share, 90,000,000 shares authorized; no shares issued and outstanding	—		—
Common Stock: 900,000,000 shares authorized, par value $0.01 per share, 84,331,536 shares outstanding as of September 24, 2022; 900,000,000 shares authorized, par value $0.01 per share, 90,193,550 shares outstanding as of December 31, 2021		843		902
Common Stock: 900,000,000 shares authorized, par value $0.01 per share, 84,916,876 and 84,347,712 shares issued and outstanding as of April 1, 2023 and December 31, 2022, respectively.						Common Stock: 900,000,000 shares authorized, par value $0.01 per share, 84,916,876 and 84,347,712 shares issued and outstanding as of April 1, 2023 and December 31, 2022, respectively.	849		843
Additional paid-in capital	Additional paid-in capital	729,633		719,451		Additional paid-in capital	738,774		734,853
Retained earnings	Retained earnings	96,865		215,611		Retained earnings	145,620		130,486
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(202,245)		(93,746)		Accumulated other comprehensive loss	(137,484)		(142,634)
Total shareholders’ equity	Total shareholders’ equity	625,096		842,218		Total shareholders’ equity	747,759		723,548
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	3,614,924	$	3,738,671	Total liabilities and shareholders’ equity	$	3,560,522	$	3,501,361

The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.

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~~JELD-WEN HOLDING, INC.~~

~~CONSOLIDATED STATEMENTS OF EQUITY~~

Three Months Ended
September 24, 2022 September 25, 2021
(amounts in thousands, except share and per share amounts) Shares Amount Shares Amount
Preferred stock, $0.01 par value per share — $ — — $ —
Common stock, $0.01 par value per share
Balance at beginning of period 85,857,994 $ 859 99,131,782 $ 991
Shares issued for exercise/vesting of share-based compensation awards 134,218 1 251,952 2
Shares repurchased (1,641,084) (17) (7,762,169) (77)
Shares surrendered for tax obligations for employee share-based transactions (19,592) — — —
Balance at period end 84,331,536 $ 843 91,621,565 $ 916
Additional paid-in capital
Balance at beginning of period $ 730,963 $ 706,787
Shares issued for exercise/vesting of share-based compensation awards — 3,021
Shares surrendered for tax obligations for employee share-based transactions (341) —
Amortization of share-based compensation (316) 6,328
Balance at period end 730,306 716,136
Employee stock notes
Balance at beginning of period (673) (673)
Net issuances, payments and accrued interest on notes — —
Balance at period end (673) (673)
Balance at period end $ 729,633 $ 715,463
Retained earnings
Balance at beginning of period $ 155,331 $ 400,783
Shares repurchased (25,274) (221,017)
Net (loss) income (33,192) 40,542
Balance at period end $ 96,865 $ 220,308
Accumulated other comprehensive income (loss)
Balance at beginning of period $ (149,973) $ (81,435)
Foreign currency adjustments (55,196) (26,895)
Unrealized gain on interest rate hedges 2,341 64
Net actuarial pension gain 583 2,003
Balance at period end $ (202,245) $ (106,263)
Total shareholders’ equity at period end $ 625,096 $ 830,424

~~The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.~~

910

JELD-WEN HOLDING, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited)

Nine Months Ended
September 24, 2022 September 25, 2021
(amounts in thousands, except share and per share amounts) Shares Amount Shares Amount
Preferred stock, $0.01 par value per share — $ — — $ —
Common stock, $0.01 par value per share
Balance at beginning of period 90,193,550 $ 902 100,806,068 $ 1,008
Shares issued for exercise/vesting of share-based compensation awards 1,112,005 11 612,760 6
Shares repurchased (6,848,356) (69) (9,749,810) (97)
Shares surrendered for tax obligations for employee share-based transactions (125,663) (1) (47,453) (1)
Balance at period end 84,331,536 $ 843 91,621,565 $ 916
Additional paid-in capital
Balance at beginning of period $ 720,124 $ 691,360
Shares issued for exercise/vesting of share-based compensation awards 2,000 5,344
Shares surrendered for tax obligations for employee share-based transactions (2,764) (1,277)
Amortization of share-based compensation 10,946 20,709
Balance at period end 730,306 716,136
Employee stock notes
Balance at beginning of period (673) (673)
Net issuances, payments and accrued interest on notes — —
Balance at period end (673) (673)
Balance at period end $ 729,633 $ 715,463
Retained earnings
Balance at beginning of period $ 215,611 $ 371,462
Shares repurchased (130,852) (277,891)
Net income 12,106 126,737
Balance at period end $ 96,865 $ 220,308
Accumulated other comprehensive income (loss)
Balance at beginning of period $ (93,746) $ (58,693)
Foreign currency adjustments (121,457) (54,600)
Unrealized gain on interest rate hedges 11,464 1,502
Net actuarial pension gain 1,494 5,528
Balance at period end $ (202,245) $ (106,263)
Total shareholders’ equity at period end $ 625,096 $ 830,424


	Three Months Ended
	April 1, 2023			March 26, 2022
(amounts in thousands, except share and per share amounts)	Shares	Amount		Shares	Amount
Preferred stock, $0.01 par value per share	—	$	—	—	$	—
Common stock, $0.01 par value per share
Balance at beginning of period	84,347,712	$	843	90,193,550	$	902

Shares issued for exercise/vesting of share-based compensation awards	604,028	7		824,074	8
Shares repurchased	—	—		(1,777,266)	(18)


Shares surrendered for tax obligations for employee share-based transactions	(34,864)	(1)		(103,904)	(1)

Balance at period end	84,916,876	$	849	89,136,454	$	891






Additional paid-in capital
Balance at beginning of period		$	735,526		$	720,124

Shares issued for exercise/vesting of share-based compensation awards		—			979

Shares surrendered for tax obligations for employee share-based transactions		(462)			(2,378)




Amortization of share-based compensation		4,383			9,664
Balance at period end		739,447			728,389




Employee stock notes
Balance at beginning of period		(673)			(673)
Net issuances, payments and accrued interest on notes		—			—
Balance at period end		(673)			(673)
Balance at period end		$	738,774		$	727,716
Retained earnings
Balance at beginning of period		$	130,486		$	215,611
Shares repurchased		—			(41,323)


Net income (loss)		15,134			(528)
Balance at period end		$	145,620		$	173,760
Accumulated other comprehensive income (loss)
Balance at beginning of period		$	(142,634)		$	(93,746)
Foreign currency adjustments		8,173			(4,033)
Unrealized (loss) gain on interest rate hedges		(3,085)			6,786
Net actuarial pension gain		62			401
Balance at period end		$	(137,484)		$	(90,592)

Total shareholders’ equity at period end		$	747,759		$	811,775

The accompanying notes are an integral part of these unaudited Consolidated Financial Statements

1011

JELD-WEN HOLDING, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

Nine Months Ended
(amounts in thousands) September 24, 2022 September 25, 2021
OPERATING ACTIVITIES
Net income $ 12,106 $ 126,737
Adjustments to reconcile net income to cash used in operating activities:
Depreciation and amortization 97,624 103,336
Deferred income taxes 9,623 (2,701)
Net loss on disposition of assets 353 923
Goodwill impairment 54,885 —
Adjustment to carrying value of assets 534 1,916
Amortization of deferred financing costs 2,298 2,296
Loss on extinguishment of debt — 1,001
Stock-based compensation 10,946 20,709
Amortization of U.S. pension expense 1,083 6,975
Recovery of cost from interest received on impaired notes (13,953) —
Other items, net 41,859 (4,335)
Net change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable (166,610) (123,860)
Inventories (146,992) (98,790)
Other assets (31,143) (14,683)
Accounts payable and accrued expenses 67,134 114,109
Change in short term and long-term tax liabilities (13,173) 1,651
Net cash (used in) provided by operating activities (73,426) 135,284
INVESTING ACTIVITIES
Purchases of property and equipment (53,070) (59,155)
Proceeds from sale of property and equipment 1,190 3,141
Purchase of intangible assets (4,392) (14,576)
Recovery of cost from interest received on impaired notes 13,953 —
Cash received for notes receivable 79 2,132
Change in securities for deferred compensation plan (486) —
Net cash used in investing activities (42,726) (68,458)
FINANCING ACTIVITIES
Change in long-term debt 84,775 (72,243)
Common stock issued for exercise of options 2,011 5,350
Common stock repurchased (131,987) (277,988)
Payments to tax authorities for employee share-based compensation (2,657) (1,278)
Net cash used in financing activities (47,858) (346,159)
Effect of foreign currency exchange rates on cash (31,732) (12,336)
Net decrease in cash and cash equivalents (195,742) (291,669)
Cash, cash equivalents and restricted cash, beginning 396,890 736,594
Cash, cash equivalents and restricted cash, ending $ 201,148 $ 444,925
For further information see Note 21 - Supplemental Cash Flow.



	Three Months Ended
(amounts in thousands)	April 1, 2023		March 26, 2022
OPERATING ACTIVITIES
Net income (loss)	$	15,134	$	(528)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization	32,790		32,565
Deferred income taxes	(4,268)		(2,449)
Net (gain) loss on disposition of assets	(90)		134

Adjustment to carrying value of assets	2,171		—

Amortization of deferred financing costs	786		726


Stock-based compensation	4,383		9,664

Amortization of U.S. pension expense	125		350

Recovery of cost from interest received on impaired notes	(1,394)		(7,027)
Other items, net	(4,345)		2,211
Net change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable	(100,229)		(157,703)
Inventories	31,779		(61,285)
Other assets	(1,775)		(34,669)
Accounts payable and accrued expenses	27,572		45,531
Change in short term and long-term tax liabilities	(3,295)		(14,387)
Net cash used in operating activities	(656)		(186,867)

INVESTING ACTIVITIES

Purchases of property and equipment	(21,432)		(15,382)
Proceeds from sale of property and equipment	398		39
Purchase of intangible assets	(2,179)		(998)

Recovery of cost from interest received on impaired notes	1,394		7,027
Cash received for notes receivable	5		48
Cash received from insurance proceeds	3,165		—
Change in securities for deferred compensation plan	(383)		—
Net cash used in investing activities	(19,032)		(9,266)

FINANCING ACTIVITIES

Change in long-term debt	341		110,623



Common stock issued for exercise of options	7		987
Common stock repurchased	—		(40,216)
Payments to tax authorities for employee share-based compensation	(447)		(111)


Net cash (used in) provided by financing activities	(99)		71,283
Effect of foreign currency exchange rates on cash	2,910		(4,940)
Net decrease in cash and cash equivalents	(16,877)		(129,790)
Cash, cash equivalents and restricted cash, beginning	220,868		396,890
Cash, cash equivalents and restricted cash, ending	$	203,991	$	267,100
For further information see Note 21. - Supplemental Cash Flow.

The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.

1112

JELD-WEN HOLDING, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Description of Company and Summary of Significant Accounting Policies

Nature of Business – JELD-WEN Holding, Inc., along with its subsidiaries, is a vertically integrated global manufacturer and distributor of windows, doors, and other building products that derives substantially all its revenues from the sale of its door and window products. Unless otherwise specified or the context otherwise requires, all references in these notes to “JELD-WEN,” “we,” “us,” “our,” or the “Company” are to JELD-WEN Holding, Inc. and its subsidiaries.

We have facilities located in the U.S., Canada, Europe, Australia, Asia, and Mexico. Our products are marketed primarily under the JELD-WEN brand name in the U.S. and Canada and under JELD-WEN and a variety of acquired brand names in Europe, Australia, and Asia.

Our revenues are affected by the level of new housing starts and remodeling activity in each of our markets. Our sales typically follow seasonal new construction and repair and remodeling industry patterns. The peak season for home construction and remodeling in many of our markets generally corresponds with the second and third calendar quarters, and therefore, sales volume is typically higher during those quarters. Our first and fourth quarter sales volumes are generally lower due to reduced repair and remodeling activity and reduced activity in the building and construction industry as a result of colder and more inclement weather in certain areas of our geographic end markets.

Basis of Presentation – The accompanying unaudited consolidated financial statements as of ~~September 24, 2022~~April 1, 2023 and for the three ~~and nine~~ months ended ~~September 24,~~April 1, 2023 and March 26, 2022, ~~and September 25, 2021,~~ respectively, have been prepared in accordance with GAAP for interim financial information and pursuant to the rules and regulations of the SEC. In the opinion of management, the unaudited consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the Company’s financial position for the periods presented. The results for the three ~~and nine~~ months ended ~~September 24, 2022~~April 1, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2022,~~2023, or any other period. The accompanying consolidated balance sheet as of December 31, ~~2021~~2022 was derived from audited financial statements included in our Annual Report on Form 10-K. The accompanying consolidated financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. Accordingly, they should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

All U.S. dollar and other currency amounts, except per share amounts, are presented in thousands unless otherwise noted.

Fiscal Year – We operate on a fiscal calendar year, and each interim quarter is comprised of two 4-week periods and one 5-week period, with each week ending on a Saturday. Our fiscal year always begins on January 1 and ends on December 31. As a result, our first and fourth quarters may have more or fewer days included than a traditional 91-day fiscal quarter.

Use of Estimates – The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions, and allocations that affect amounts reported in the consolidated financial statements and related notes. Significant items that are subject to such estimates and assumptions include, but are not limited to, long-lived assets including goodwill and other intangible assets, employee benefit obligations, income tax uncertainties, contingent assets and liabilities, provisions for bad debt, inventory, warranty liabilities, legal claims, valuation of derivatives, environmental remediation, and claims relating to self-insurance. Actual results could differ due to the uncertainty inherent in the nature of these estimates.

COVID-19 – The CARES Act in the U.S. and similar legislation in other jurisdictions includes measures that assisted companies in responding to the COVID-19 pandemic. These measures consisted primarily of cash assistance to support employment levels and deferment of remittance of certain non-income tax expense payments. The most significant impact was from the CARES Act in the U.S., which included a provision that allowed employers to defer the remittance of the employer portion of the social security tax relating to 2020. The deferred employment payment must be paid over two years. Original payment due dates were in 2021 and 2022, however updated guidance provided by the Internal Revenue Service in December 2021 allowed for these payments to be made during 2022 and 2023. The Company deferred $20.9 million of the employer portion of social security tax in 2020, of which $9.9 million was paid in the first quarter of 2022 and the remaining $11.0 million ~~is included in accrued payroll and benefits~~was paid in the ~~consolidated balance sheet as~~fourth quarter of ~~September 24,~~ 2022. ~~As of December 31, 2021, the deferral $20.9 million was equally recorded between accrued payroll and benefits and deferred credits and other liabilities in the consolidated balance sheet.~~

Recent Accounting Standards – In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and

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exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of LIBOR or by another reference rate expected to be discontinued. In January 2021, the FASB issued

ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, to clarify the scope of ASU No. 2020-04. ~~The amendments are effective for all entities as~~In December 2022, the FASB issued ASU No. 2022-06, Deferral of ~~March 12, 2020~~the Sunset Date of Topic 848, which extended the relief provisions under Topic 848 through December 31, ~~2022.~~2024. In May 2020, we elected the expedient within ASC 848 which allows us to assume that our hedged interest payments are probable of occurring regardless of any expected modifications in their terms related to reference rate reform. In addition, ASC 848 allows for the option to change the method of assessing effectiveness upon a change in critical terms of the derivative or the hedged transactions and upon the end of relief under ASC 848. At this time, we have elected to continue the method of assessing effectiveness as documented in the original hedge documentation and apply the practical expedients related to probability to assume that the reference rate on the hypothetical derivative matches the reference rate on the hedging instrument. We plan to evaluate the remaining expedients for adoption, as applicable, when contracts are modified. We currently do not expect this guidance to have a material impact on our consolidated financial statements. Refer to Note 18 - Derivative Financial Instruments for additional disclosure information relating to our hedging activity.

We have considered the applicability and impact of all ASUs. We have assessed ASUs not listed above and have determined that they were either not applicable or were not expected to have a material impact on our financial statements.

Note 2. Accounts Receivable

We sell our manufactured products to a large number of customers, primarily in the residential housing construction and remodel sectors, broadly dispersed across many domestic and foreign geographic regions. We assess the credit risk relating to our accounts receivable based on quantitative and qualitative factors, ~~primarily~~including historical credit collections within each region where we have operations. We perform ongoing credit evaluations of our customers to minimize credit risk. We do not usually require collateral for accounts receivable, but ~~will~~do require advance payment, guarantees, a security interest in the products sold to a customer, and/or letters of credit in certain situations. Customer accounts receivable converted to notes receivable are collateralized by inventory or other collateral.

At ~~September 24, 2022~~April 1, 2023 and December 31, ~~2021,~~2022, we had an allowance for credit losses of ~~$16.4~~$18.1 million and ~~$10.2~~$16.3 million, respectively. The increase in the allowance for credit losses in the three months ended April 1, 2023 is due to the credit losses incurred from the bankruptcy of a large Australasian customer, partially offset by a reduction in our allowance for credit losses in our North America segment due to improved collections.

Note 3. Inventories

Inventories are stated at the lower of cost or net realizable value. Finished goods and work-in-process inventories include material, labor, and manufacturing overhead costs.


(amounts in thousands)	(amounts in thousands)	September 24, 2022		December 31, 2021		(amounts in thousands)	April 1, 2023		December 31, 2022
Raw materials	Raw materials	$	560,913	$	478,566	Raw materials	$	475,610	$	511,681
Work in process	Work in process	36,270		36,065		Work in process	29,921		31,310
Finished goods	Finished goods	128,676		101,340		Finished goods	132,272		123,464
Total inventories	Total inventories	$	725,859	$	615,971	Total inventories	$	637,803	$	666,455

1314

Note 4. Property and Equipment, Net


(amounts in thousands)	(amounts in thousands)	September 24, 2022		December 31, 2021		(amounts in thousands)	April 1, 2023		December 31, 2022
Property and equipment	Property and equipment	$	2,076,156	$	2,137,861	Property and equipment	$	2,151,549	$	2,135,848
Accumulated depreciation	Accumulated depreciation	(1,330,048)		(1,339,057)		Accumulated depreciation	(1,393,407)		(1,373,362)
Total property and equipment, net	Total property and equipment, net	$	746,108	$	798,804	Total property and equipment, net	$	758,142	$	762,486

We ~~monitor all property~~recorded accelerated depreciation of our plant and equipment ~~for any indicators~~ of ~~potential impairment whenever events or changes in circumstances indicate the carrying amount of the corresponding asset group may not be recoverable. We recorded no impairment charges for~~$2.2 million during the three months ended ~~September 24, 2022~~April 1, 2023 within restructuring and ~~$0.5 million for~~asset related charges in the ~~nine~~accompanying consolidated statements of operations. No accelerated depreciation was recorded during the three months ended ~~September 24,~~March 26, 2022. ~~We recorded impairment charges of $0.7 million and $1.8 million for the three and nine months ended September 25, 2021.~~

The effect on our carrying value of property and equipment due to currency translations for foreign property and equipment, net, was ~~a decrease~~an increase of ~~$37.6~~$3.9 million as of ~~September 24, 2022~~April 1, 2023 compared to December 31, ~~2021.~~2022, respectively.

Depreciation expense was recorded as follows:


		Three Months Ended				Nine Months Ended					Three Months Ended
(amounts in thousands)	(amounts in thousands)	September 24, 2022		September 25, 2021		September 24, 2022		September 25, 2021		(amounts in thousands)	April 1, 2023		March 26, 2022
Cost of sales	Cost of sales	$	22,793	$	22,777	$	67,797	$	69,020	Cost of sales	$	22,916	$	22,512
Selling, general and administrative	Selling, general and administrative	1,629		2,150		5,057		6,944		Selling, general and administrative	1,964		1,708
Total depreciation expense	Total depreciation expense	$	24,422	$	24,927	$	72,854	$	75,964	Total depreciation expense	$	24,880	$	24,220

Note 5. Goodwill

The following table summarizes the changes in goodwill by reportable segment:

(amounts in thousands) North
America Europe Australasia Total
Reportable
Segments
Balance as of December 31, 2021 $ 182,645 $ 278,668 $ 83,900 $ 545,213
Impairment — (54,885) — (54,885)
Currency translation (357) (39,580) (7,097) (47,034)
Balance as of September 24, 2022 $ 182,288 $ 184,203 $ 76,803 $ 443,294

We test goodwill for impairment annually during the fourth quarter for all of our reporting units, and more frequently if events or circumstances warrant such a review. We estimate the fair value of the reporting units using discounted cash flow projections. In determining the fair value of the reporting units, we make significant assumptions and estimates about the extent and timing of future cash flows all of which are considered Level 3 inputs, including revenue growth rates, projected segment EBITDA, discount rates, capital expenditures, and terminal growth rates as well as an estimate of economic and market conditions over the forecast period. If the carrying value of the reporting unit exceeds its estimated fair value, a goodwill impairment charge is recorded for the difference, with the impairment loss limited to the total amount of goodwill allocated to that reporting unit.

During the quarter ended September 24, 2022, management identified various qualitative and quantitative factors which collectively indicated a triggering event had occurred within our North America and Europe reporting units. These factors included the macroeconomic environment in each region including increasing interest rates, persistent inflation,and operational inefficiencies attributable to ongoing global supply chain disruptions, the continuing geopolitical environment in Europe associated with the war in Ukraine, and foreign exchange fluctuations. All of these factors have negatively impacted our business performance.

Based upon the results of our interim impairment analysis, we concluded that the carrying value of our Europe reporting unit exceeded its fair value, and we recorded a goodwill impairment charge of $54.9 million, representing a partial impairment of goodwill assigned to the Europe reporting unit. In addition, we determined the fair value of our North America reporting unit exceeded its book value by 14% and concluded the carrying value of our North America reporting unit was not impaired. There can be no assurance the estimates and assumptions used in the interim impairment analysis,

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particularly our long-term financial projections, will prove to be accurate, and as a result, a future goodwill impairment charge could have a material effect on the Company’s consolidated financial position and results of operations.


(amounts in thousands)	North America		Europe		Australasia		Total Reportable Segments






Balance as of December 31, 2022	$	182,269	$	199,684	$	78,552	$	460,505






Currency translation	11		3,889		(802)		3,098
Balance as of April 1, 2023	$	182,280	$	203,573	$	77,750	$	463,603

Note 6. Intangible Assets, Net

The cost and accumulated amortization values of our intangible assets were as follows:


		September 24, 2022							April 1, 2023
(amounts in thousands)	(amounts in thousands)	Cost		Accumulated Amortization		Net Book Value		(amounts in thousands)	Cost		Accumulated Amortization		Net Book Value
Customer relationships and agreements	Customer relationships and agreements	$	135,048	$	(74,535)	$	60,513	Customer relationships and agreements	$	138,964	$	(83,241)	$	55,723
Software	Software	117,272		(42,037)		75,235		Software	121,305		(46,461)		74,844
Trademarks and trade names	Trademarks and trade names	52,092		(11,638)		40,454		Trademarks and trade names	53,420		(13,153)		40,267
Patents, licenses and rights	Patents, licenses and rights	42,727		(25,074)		17,653		Patents, licenses and rights	42,419		(26,522)		15,897
Total amortizable intangibles	Total amortizable intangibles	$	347,139	$	(153,284)	$	193,855	Total amortizable intangibles	$	356,108	$	(169,377)	$	186,731

December 31, 2021
(amounts in thousands) Cost Accumulated
Amortization Net
Book Value
Customer relationships and agreements $ 145,940 $ (73,635) $ 72,305
Software 118,114 (35,816) 82,298
Trademarks and trade names 55,806 (10,771) 45,035
Patents, licenses and rights 46,353 (23,810) 22,543
Total amortizable intangibles $ 366,213 $ (144,032) $ 222,181


	December 31, 2022
(amounts in thousands)	Cost		Accumulated Amortization		Net Book Value
Customer relationships and agreements	$	137,914	$	(79,761)	$	58,153
Software	119,239		(43,208)		76,031
Trademarks and trade names	53,481		(12,563)		40,918
Patents, licenses and rights	42,821		(25,818)		17,003
Total amortizable intangibles	$	353,455	$	(161,350)	$	192,105

The effect on our carrying value of intangible assets due to currency translations for foreign intangible assets ~~was a decrease of $8.5 million~~ as of ~~September 24, 2022~~April 1, 2023 compared to December 31, ~~2021.~~2022 was nominal.

~~Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of the corresponding asset group may not be recoverable.~~ Intangible assets that become fully amortized are removed from the accounts in the period that they become fully amortized. Amortization expense was recorded as follows:

Three Months Ended Nine Months Ended
(amounts in thousands) September 24, 2022 September 25, 2021 September 24, 2022 September 25, 2021
Amortization expense $ 7,810 $ 8,373 $ 23,993 $ 24,727


	Three Months Ended

(amounts in thousands)	April 1, 2023		March 26, 2022
Amortization expense	$	7,487	$	8,145

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Note 7. Accrued Expenses and Other Current Liabilities


(amounts in thousands)	(amounts in thousands)	September 24, 2022		December 31, 2021		(amounts in thousands)	April 1, 2023		December 31, 2022
Accrued sales and advertising rebates	Accrued sales and advertising rebates	$	88,245	$	90,623	Accrued sales and advertising rebates	$	76,652	$	93,337
Current portion of operating lease liability	Current portion of operating lease liability	42,855		43,880		Current portion of operating lease liability	43,546		42,494
Non-income related taxes	Non-income related taxes	33,598		25,030		Non-income related taxes	31,076		25,700
Accrued expenses						Accrued expenses	24,032		18,423
Current portion of warranty liability (Note 8)						Current portion of warranty liability (Note 8)	23,114		23,079
Deferred revenue and customer deposits	Deferred revenue and customer deposits	26,484		25,568		Deferred revenue and customer deposits	23,104		24,753
Accrued freight	Accrued freight	23,081		19,020		Accrued freight	18,382		17,398
Current portion of warranty liability (Note 8)		22,494		23,523
Accrued interest payable	Accrued interest payable	18,453		3,633		Accrued interest payable	17,508		4,038
Accrued expenses		18,453		18,636
Current portion of accrued claim costs relating to self-insurance programs	Current portion of accrued claim costs relating to self-insurance programs	17,543		14,352		Current portion of accrued claim costs relating to self-insurance programs	17,375		17,932
Accrued income taxes payable	Accrued income taxes payable	17,058		16,237		Accrued income taxes payable	9,900		12,848
Current portion of restructuring accrual		4,934		171
Current portion of restructuring accrual (Note 15)						Current portion of restructuring accrual (Note 15)	3,985		5,038
Legal claims provision						Legal claims provision	3,477		3,490
Current portion of derivative liability (Note 18)	Current portion of derivative liability (Note 18)	3,414		5,527		Current portion of derivative liability (Note 18)	2,364		3,346
Legal claims provision		3,036		3,476
Total accrued expenses and other current liabilities	Total accrued expenses and other current liabilities	$	319,648	$	289,676	Total accrued expenses and other current liabilities	$	294,515	$	291,876

The legal claims provision relates primarily to contingencies associated with the ongoing legal matters disclosed in Note 20 - Commitments and Contingencies.

The accrued sales and advertising rebates, accrued interest payable, accrued freight, and non-income related taxes can fluctuate significantly period-over-period due to timing of payments.

~~Prior period balances in the table above have been reclassified to conform to current period presentation.~~

Note 8. Warranty Liability

Warranty terms vary from one year to lifetime on certain window and door components. Warranties are normally limited to servicing or replacing defective components for the original customer. Product defects arising within six months of sale are classified as manufacturing defects and are not included in the current period expense below. Some warranties are transferable to subsequent owners and are either limited to 10 years from the date of manufacture or require pro-rata payments from the customer. A provision for estimated warranty costs is recorded at the time of sale based on historical experience and is periodically adjusted to reflect actual experience.

An analysis of our warranty liability is as follows:


(amounts in thousands)	(amounts in thousands)	September 24, 2022		September 25, 2021		(amounts in thousands)	April 1, 2023		March 26, 2022
Balance as of January 1	Balance as of January 1	$	54,860	$	52,296	Balance as of January 1	$	54,337	$	54,860
Current period charges	Current period charges	21,326		21,143		Current period charges	7,240		7,151

Experience adjustments	Experience adjustments	384		3,306		Experience adjustments	539		684
Payments	Payments	(21,169)		(23,327)		Payments	(7,864)		(7,742)

Currency translation	Currency translation	(1,451)		(203)		Currency translation	108		(4)
Balance at period end	Balance at period end	53,950		53,215		Balance at period end	54,360		54,949
Current portion	Current portion	(22,494)		(22,545)		Current portion	(23,114)		(23,387)
Long-term portion	Long-term portion	$	31,456	$	30,670	Long-term portion	$	31,246	$	31,562

The most significant component of our warranty liability as of April 1, 2023 and March 26, 2022 is in the North America segment. As of April 1, 2023, the warranty liability in the North America segment ~~which~~ totaled $46.2 million ~~at September 24, 2022,~~ after discounting future estimated cash flows at rates between 0.53% and ~~2.75%~~3%. Without discounting, the liability would have been higher by approximately ~~$2.8~~$3.0 million.

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Note 9. Long-Term Debt

Our long-term debt, net of original issue discount and unamortized debt issuance costs, consisted of the following:


		September 24, 2022	September 24, 2022					December 31, 2021			April 1, 2023				April 1, 2023			December 31, 2022
(amounts in thousands)	(amounts in thousands)	Interest Rate			(amounts in thousands)		Interest Rate

Senior Secured Notes and Senior Notes	Senior Secured Notes and Senior Notes	4.63% - 6.25%			$	1,050,000					$	1,050,000	Senior Secured Notes and Senior Notes	4.63% - 6.25%			$	1,050,000		$	1,050,000
Term loans	Term loans	1.30% - 4.74%	544,736					547,598		Term loans	1.30% - 7.09%				540,572			541,970
Revolving credit facilities	Revolving credit facilities	3.81% - 4.01%	115,000					—		Revolving credit facilities	5.93% - 8.25%				63,000			55,000
Finance leases and other financing arrangements	Finance leases and other financing arrangements	1.25% - 6.17%	96,025					97,874		Finance leases and other financing arrangements	1.25% - 7.16%				84,995			89,784
Mortgage notes	Mortgage notes	2.22% - 2.72%	21,009					25,411		Mortgage notes	4.62% - 5.12%				22,624			22,472

Total Debt	Total Debt		1,826,770					1,720,883		Total Debt					1,761,191			1,759,226
Unamortized debt issuance costs and original issue discounts	Unamortized debt issuance costs and original issue discounts		(12,411)					(14,626)		Unamortized debt issuance costs and original issue discounts					(10,841)			(11,597)
Current maturities of long-term debt	Current maturities of long-term debt		(40,086)					(38,561)		Current maturities of long-term debt					(29,109)			(34,391)
Long-term debt	Long-term debt		$	1,774,273				$	1,667,696	Long-term debt					$	1,721,241		$	1,713,238

Summaries of our significant changes to outstanding debt agreements as of ~~September 24, 2022~~April 1, 2023 are as follows:

Senior Secured Notes and Senior Notes

In May 2020, we issued $250.0 million of Senior Secured Notes bearing interest at 6.25% and maturing in May 2025 in a private placement for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The proceeds were net of fees and expenses associated with debt issuance, including an underwriting fee of 1.25%. Interest is payable semiannually, in arrears, each May and November.

In December 2017, we issued $800.0 million of unsecured Senior Notes in two tranches: $400.0 million bearing interest at 4.63% and maturing in December 2025, and $400.0 million bearing interest at 4.88% and maturing in December 2027 in a private placement for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act.

Term Loans

U.S. Facility - Initially executed in October 2014, we amended the Term Loan Facility in July 2021 to, among other things, extend the maturity date from December 2024 to July 2028 and provide additional covenant flexibility. Pursuant to the amendment, certain existing and new lenders advanced $550.0 million of replacement term loans, the proceeds of which were used to prepay in full the amount outstanding under the previously existing term loans. The replacement term loans bear interest at LIBOR (subject to a floor of 0.00%) plus a margin of 2.00% to 2.25% depending on JWI’s corporate credit ratings. In addition, the amendment also modifies certain other terms and provisions of the Term Loan ~~Facility.~~Facility, and add language to address the replacement of LIBOR with a SOFR basis upon the June 30, 2023 cessation of the publication of LIBOR. Voluntary prepayments of the replacement term loans are permitted at any time, in certain minimum principal

amounts, but were subject to a 1.00% premium during the first six months. The amendment requires 0.25% of the initial principal to be repaid quarterly until maturity. As a result of this amendment, we recognized debt extinguishment costs of $1.3 million, which included $1.0 million of unamortized debt issuance costs and original discount fees. As of the date of the amendment, the outstanding principal balance, net of original issue discount, was $548.6 million. As of ~~September 24, 2022,~~April 1, 2023, the outstanding principal balance, net of original issue discount, was ~~$543.3~~$539.3 million.

In May 2020, we entered into interest rate swap agreements with a weighted average fixed rate of 0.395% paid against one-month LIBOR floored at 0.00% with outstanding notional amounts aggregating to $370.0 million corresponding to that amount of the debt outstanding under our Term Loan Facility. Absent any action, interest rate hedges will convert to a SOFR basis after June 30, 2023, although the Company plans to proactively amend these hedges to a SOFR basis prior to that date. The interest rate swap agreements are designated as cash flow hedges of a portion of the interest obligations on our Term Loan Facility borrowings and mature in December 2023. See Note 18 - Derivative Financial Instruments for additional information on our derivative assets and liabilities.

~~Australia Facility -~~ ~~During the second quarter of 2021, we repaid the AUD 50.0 million ($38.4 million) outstanding principal balance of the floating rate revolving loan facility and terminated the term loan commitment.~~

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Revolving Credit Facilities

ABL Facility - In July 2021, we amended the ABL Facility to, among other things, extend the maturity date from December 2022 to July 2026, increase the aggregate commitment to $500.0 million, provide additional covenant flexibility, conform certain terms and provisions to the Term Loan Facility, and amend the interest rate grid applicable to the loans thereunder ~~provide additional covenant flexibility, and conform certain terms and provisions~~by adding language to address the ~~Term Loan Facility.~~replacement of LIBOR with a SOFR basis upon the June 30, 2023 cessation of the publication of LIBOR. Pursuant to the amendment, the amount allocated to U.S. borrowers was increased to $465.0 million. The amount allocated to Canadian borrowers was maintained at $35.0 million. Borrowings under the ABL Facility bear, at the borrower’s option, interest at either a base rate plus a margin of 0.25% to 0.50% depending on excess availability or LIBOR (subject to a floor of 0.00%) plus a margin of 1.25% to 1.50% depending on excess availability. As of ~~September 24, 2022,~~April 1, 2023, we had ~~$115.0~~$63.0 million of outstanding borrowings, ~~$34.6~~$31.4 million in letters of credit and ~~$347.4~~$401.2 million available under the ABL Facility.

Australia Senior Secured Credit Facility - In June 2019, we amended the Australia Senior Secured Credit Facility, reallocating availability from the Australia Term Loan Facility and collapsing the floating rate revolving loan facility into an AUD 35.0 million interchangeable facility to be used for guarantees, asset financing, and loans of twelve months or less. The interchangeable facility does not have a set maturity date but is instead subject to an annual review each June.

In May 2020, we amended the Australia Senior Secured Credit Facility to relax certain financial covenants. The amended non-term loan portion of the facility bore line fees of 0.70%, compared to line fees of 0.50% under the previous amendment. The amendment also provided for a supplemental AUD 30.0 million floating rate revolving loan facility.

In December 2021, we amended the Australia Senior Secured Credit Facility to reinstate maintenance financial covenant ratios to pre-pandemic thresholds and renewed the facility through its next annual review. The amended facility includes line fees of 0.50%, compared to line fees of 0.70% under the previous amendment. As of ~~September 24, 2022,~~April 1, 2023, we had AUD ~~23.0~~22.5 million ($~~15.2~~15.1 million) available under this facility.

The Australia Senior Secured Credit Facility is secured by guarantees of JWA and its subsidiaries, fixed and floating charges on the assets of JWA group, and mortgages on certain real properties owned by the JWA group. The combined agreement requires that JWA maintain certain financial ratios, including a minimum consolidated interest coverage ratio and a maximum consolidated debt to EBITDA ratio. The agreement limits dividends and repayments of intercompany loans where the JWA group is the borrower and limits loans or other financial accommodations to non-obligor entities.

At ~~September 24, 2022,~~April 1, 2023, we had combined borrowing availability of ~~$362.6~~$416.3 million under our revolving credit facilities.

Mortgage Notes – In December 2007, we entered into thirty-year mortgage notes secured by land and buildings in Denmark with principal payments which began in 2018. As of ~~September 24, 2022,~~April 1, 2023, we had DKK ~~159.2~~154.6 million ($~~21.0~~22.6 million) outstanding under these notes.

Finance leases and other financing arrangements – In addition to finance leases, we include insurance premium financing arrangements and loans secured by equipment in this category. As of ~~September 24, 2022,~~April 1, 2023, we had ~~$96.0~~$85.0 million outstanding in this category, with maturities ranging from ~~2022~~2023 to ~~2028.~~2030.

As of ~~September 24, 2022,~~April 1, 2023, we were in compliance with the terms of all of our credit facilities and the indentures governing the Senior Notes and Senior Secured Notes.

Note 10. Income Taxes

The Company previously completed its accounting for the income tax effects of the Tax Act. We have considered ongoing developments released through the date hereof and determined that they have no material impact on our tax accounts for the nine months ended September 24, 2022. Final guidance, once issued, may materially affect our conclusions regarding the net related effects of the Tax Act on our unaudited consolidated financial statements. Until then, management will continue to monitor and work with its tax advisors to interpret any guidance issued.

The effective income tax rate for continuing operations was ~~(100.8)%~~29.1% and ~~72.4%~~26.3% for the three ~~and nine~~ months ended ~~September 24,~~April 1, 2023 and March 26, 2022, ~~respectively, compared to (7.8)% and 19.0% for the three and nine months ended September 25, 2021,~~ respectively. In accordance with ASC 740-270, we recorded a tax expense of ~~$16.7~~$6.2 million and ~~$31.7 million in the three and nine months ended September 24, 2022, respectively, compared to~~ a tax benefit of ~~$2.9 million and tax expense of $29.8~~$0.2 million from operations in the three ~~and nine~~ months ended ~~September 25, 2021,~~April 1, 2023 and March 26, 2022, respectively, by applying our estimated annual effective tax rate to year-to-date income for includable entities during the respective periods. ~~The effective tax rate for the three and nine months ended September 24, 2022 is impacted by goodwill impairment charges in the third quarter of 2022.~~ Our estimated annual effective tax rate for both years includes the impact of the tax on GILTI. The application of the estimated annual effective tax rate in interim periods may result in a significant variation in the customary relationship between income tax expense and pretax accounting income due to the seasonality of our global

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~~business.~~ Entities that are currently generating losses and for which there is a full valuation allowance are excluded from the worldwide effective tax rate calculation and are calculated separately.

The impact of significant discrete items is separately recognized in the quarter in which they occur. The tax expense for discrete items included in the tax provision for continuing operations for the three months ended ~~September 24, 2022~~April 1, 2023 was ~~an expense of $1.9~~$1.0 million, ~~compared to a benefit of $9.3 million for the three months ended September 25, 2021. The discrete tax expense amounts for the three months ended September 24, 2022 were~~ comprised primarily of ~~$2.8~~$1.2 million of tax expense attributable to share-based compensation, partially offset by $1.1 million of tax benefit attributed to return-to-provision adjustments. The discrete tax benefit amounts for the three months ended September 25, 2021 were comprised primarily of $12.3 million of tax benefit attributed to return-to-provision adjustments, primarily related to the impact of GILTI, and $2.0$0.2 million of tax benefit attributable to ~~research~~uncertain tax positions related to Denmark and ~~development~~Germany taken in the previous years. Discrete tax ~~credits, partially offset by $4.4 million of~~items recorded in the three months ended March 26, 2022 were insignificant to the tax expense ~~attributable to removing our assertion on certain undistributed foreign earnings, which is discussed below, and $0.4 million of tax expense attributable to interest expense on uncertain tax positions.~~

~~The tax benefit related to discrete items included~~recorded in the tax provision for continuing operations for the nine months ended September 24, 2022 was $4.5 million compared to $10.9 million for the nine months ended September 25, 2021. The discrete tax benefits for the nine months ended September 24, 2022 were comprised primarily of $9.5 million of tax benefit attributable to the release of valuation allowance on state net operating losses and $1.2 million of tax benefit attributable to return-to-provision adjustments, partially offset by $3.4 million of tax expense attributable to share-based compensation and $2.6 million of tax expense attributable to current period interest expense on uncertain tax positions. The discrete benefit amounts for the nine months ended September 25, 2021 were comprised primarily of $12.2 million of tax benefit attributed to return-to-provision adjustments, primarily related to the impact of GILTI, $2.0 million of tax benefit attributable to research and development tax credits, $1.8 million of tax benefit related to future changes to the UK tax rate enacted in the period, $0.4 million of tax benefit attributable to share-based compensation, partially offset by $4.4 million of tax expense attributable to removing our assertion on certain undistributed foreign earnings, which is discussed below, and $1.0 million of tax expense attributable to interest expense on uncertain tax positions.respective period.

Under ASC 740-10, we provide for uncertain tax positions and the related interest expense by adjusting unrecognized tax benefits and accrued interest accordingly. We recognize potential interest and penalties related to unrecognized tax benefits in income tax expense. We had unrecognized tax benefits without regard to accrued interest of ~~$27.0~~$31.5 million and ~~$26.8~~$29.3 million as of ~~September 24, 2022~~April 1, 2023 and December 31, ~~2021,~~2022, respectively.

~~In the third quarter~~The Company continually evaluates its global cash needs. As of ~~2022,~~April 1, 2023, the Company ~~repatriated $82.2 million from certain~~continues to make an indefinite reinvestment assertion on the future earnings of its foreign subsidiaries and does not anticipate any additional remittances in the foreseeable future. For additional explanation regarding current operating challenges within our European segment and reporting unit, refer to Note 5 - ~~Goodwill~~ ~~in our financial statements. As a result, the Company has asserted that its future earnings generated in Europe~~ in excess of previously taxed earnings ~~are permanently reinvested as of September 24, 2022~~ and ~~will not record~~no additional deferred ~~taxes on such amounts in future periods.~~tax expense is recorded.

Note 11. Segment Information

We report our segment information in the same way management internally organizes the business ~~in assessing~~to assess performance and ~~making~~make decisions regarding allocation of resources in accordance with ASC 280-10- Segment Reporting. We ~~determined that we~~ have three reportable segments, organized and managed principally byin geographic ~~region.~~regions. Our reportable segments are North America, Europe, and Australasia. We report all other business activities in Corporate and unallocated costs. Factors considered in determining the three reportable segments include the nature of business activities, the management structure accountable directly to the CODM, the discrete financial information available and the information regularly reviewed by the CODM. Management reviews net revenues and Adjusted EBITDA to evaluate segment performance and allocate resources. We define Adjusted EBITDA as net income (loss), adjusted for the following items: (income) loss from discontinued operations, net of tax; ~~equity earnings of non-consolidated entities;~~ income tax expense (benefit) ~~expense;~~; depreciation and amortization; interest expense, ~~net; impairment~~net; and certain special items consisting of non-recurring legal and professional expenses and settlements; restructuring and asset related charges; ~~gain on previously held shares of equity investment; (gain) loss on sale of property~~facility closure, consolidation, and ~~equipment;~~other related costs and adjustments; M&A related costs; share-based compensation expense; non-cash foreign exchange transaction/translation (income) loss; and other ~~items; other non-cash items; and costs related to debt restructuring and debt refinancing.~~special items.

The following tables set forth certain information relating to our segments’ operations:


(amounts in thousands)	North America		Europe		Australasia		Total Operating Segments		Corporate and Unallocated Costs		Total Consolidated
Three Months Ended April 1, 2023
Total net revenues	$	768,122	$	312,621	$	145,670	$	1,226,413	$	—	$	1,226,413
Intersegment net revenues	(89)		(132)		(3,575)		(3,796)		—		(3,796)
Net revenues from external customers	$	768,033	$	312,489	$	142,095	$	1,222,617	$	—	$	1,222,617



Three Months Ended March 26, 2022
Total net revenues	$	722,571	$	323,306	$	130,433	$	1,176,310	$	—	$	1,176,310
Intersegment net revenues	(228)		(34)		(5,026)		(5,288)		—		(5,288)
Net revenues from external customers	$	722,343	$	323,272	$	125,407	$	1,171,022	$	—	$	1,171,022

(amounts in thousands) North
America Europe Australasia Total Operating
Segments Corporate
and
Unallocated
Costs Total
Consolidated
Three Months Ended September 24, 2022
Total net revenues $ 835,319 $ 305,011 $ 165,213 $ 1,305,543 $ — $ 1,305,543
Intersegment net revenues (185) (120) (9,428) (9,733) — (9,733)
Net revenues from external customers $ 835,134 $ 304,891 $ 155,785 $ 1,295,810 $ — $ 1,295,810
Goodwill impairment — (54,885) — (54,885) — (54,885)
Impairment and restructuring charges 814 3,411 26 4,251 2,328 6,579
Adjusted EBITDA 105,291 18,086 19,940 143,317 (26,788) 116,529
Three Months Ended September 25, 2021
Total net revenues $ 676,937 $ 324,169 $ 151,382 $ 1,152,488 $ — $ 1,152,488
Intersegment net revenues (144) (1,615) (4,144) (5,903) — (5,903)
Net revenues from external customers $ 676,793 $ 322,554 $ 147,238 $ 1,146,585 $ — $ 1,146,585
Impairment and restructuring charges 114 314 169 597 (21) 576
Adjusted EBITDA 76,889 23,780 17,565 118,234 (19,362) 98,872


(amounts in thousands)	North America		Europe		Australasia		Total Operating Segments		Corporate and Unallocated Costs		Total Consolidated
Three Months Ended April 1, 2023
Net income (loss)	$	35,249	$	7,299	$	5,317	$	47,865	$	(32,731)	$	15,134
Income tax expense (benefit)	14,533		1,415		2,348		18,296		(12,084)		6,212
Depreciation and amortization	17,798		7,433		4,447		29,678		3,112		32,790
Interest expense, net	2,834		128		869		3,831		17,390		21,221
Restructuring and asset related charges	7,812		1,267		—		9,079		187		9,266

Net other special items	972		95		(386)		681		8,231		8,912
Adjusted EBITDA	$	79,198	$	17,637	$	12,595	$	109,430	$	(15,895)	$	93,535
Three Months Ended March 26, 2022
Net income (loss)	$	38,068	$	(631)	$	2,017	$	39,454	$	(39,982)	$	(528)
Income tax expense (benefit)(1)	1,008		1,398		996		3,402		(3,590)		(188)
Depreciation and amortization	16,685		7,892		4,844		29,421		3,144		32,565
Interest expense, net	1,127		1,805		1,014		3,946		14,408		18,354
Restructuring and asset related charges	—		—		22		22		(21)		1

Net other special items	10,197		4,234		1,479		15,910		14,135		30,045
Adjusted EBITDA	$	67,085	$	14,698	$	10,372	$	92,155	$	(11,906)	$	80,249

(amounts in thousands) North
America Europe Australasia Total Operating
Segments Corporate
and
Unallocated
Costs Total
Consolidated
Nine Months Ended September 24, 2022
Total net revenues $ 2,397,370 $ 968,364 $ 452,597 $ 3,818,331 $ — $ 3,818,331
Intersegment net revenues (786) (154) (19,591) (20,531) — (20,531)
Net revenues from external customers $ 2,396,584 $ 968,210 $ 433,006 $ 3,797,800 $ — $ 3,797,800
Goodwill impairment — (54,885) — (54,885) — (54,885)
Impairment and restructuring charges 5,565 3,945 79 9,589 2,287 11,876
Adjusted EBITDA 265,848 52,824 46,184 364,856 (42,283) 322,573
Nine Months Ended September 25, 2021
Total net revenues $ 2,057,081 $ 995,451 $ 447,379 $ 3,499,911 $ — $ 3,499,911
Intersegment net revenues (545) (2,635) (11,948) (15,128) — (15,128)
Net revenues from external customers $ 2,056,536 $ 992,816 $ 435,431 $ 3,484,783 $ — $ 3,484,783
Impairment and restructuring charges 1,030 1,441 253 2,724 (76) 2,648
Adjusted EBITDA 272,002 92,358 48,759 413,119 (68,094) 345,025
(1)Income tax expense (benefit) in Corporate and unallocated costs includes the tax impact of US Operations in the three months ended March 26, 2022.

Reconciliations of net income to Adjusted EBITDA are as follows:

Three Months Ended Nine Months Ended
(amounts in thousands) September 24, 2022 September 25, 2021 September 24, 2022 September 25, 2021
Net income (loss) $ (33,192) $ 40,542 $ 12,106 $ 126,737
Income tax expense (benefit) 16,665 (2,946) 31,698 29,772
Depreciation and amortization 32,546 33,661 97,624 103,336
Interest expense, net 21,138 19,377 59,714 56,692
Goodwill impairment 54,885 — 54,885 —
Impairment and restructuring charges (1)
9,747 1,124 15,066 3,466
Loss on sale of property and equipment 76 561 265 993
Share-based compensation expense (316) 6,328 10,946 20,709
Non-cash foreign exchange transaction/translation loss (income) 1,620 (2,812) 7,901 (16,308)
Other items (2)
13,240 1,695 31,207 18,286
Other non-cash items (3)
120 — 1,161 —
Costs relating to debt restructuring and debt refinancing — 1,342 — 1,342
Adjusted EBITDA $ 116,529 $ 98,872 $ 322,573 $ 345,025


	Three Months Ended
(amounts in thousands)	April 1, 2023		March 26, 2022
Net income (loss)	$	15,134	$	(528)



Income tax expense (benefit)	6,212		(188)
Depreciation and amortization	32,790		32,565
Interest expense, net	21,221		18,354

Special items:
Legal and professional expenses and settlements(1)	1,822		1,916
Restructuring and asset related charges(2)	9,266		1

Facility closure, consolidation, and other related costs and adjustments(3)	1,347		132
M&A related costs(4)	4,550		3,270

Share-based compensation expense(5)	4,383		9,664
Non-cash foreign exchange transaction/translation (income) loss(6)	(3,066)		6,218
Other special items (7)	(124)		8,845



Adjusted EBITDA	$	93,535	$	80,249

(1)~~Impairment~~Legal and ~~restructuring charges consist of (i) impairment~~professional expenses and ~~restructuring charges that are included in our accompanying unaudited consolidated statements of operations plus (ii) additional charges relating~~settlements primarily related to ~~inventory and/or manufacturing of our products that are included in cost of sales in our accompanying unaudited consolidated statements of operations were $3,168~~litigation and $548 for the three months ended September 24, 2022 and September 25, 2021, respectively, and $3,190 and $818 for the nine months ended September 24, 2022 and September 25, 2021, respectively. For further explanation of impairment and restructuring charges that are included in our unaudited consolidated statements of operations, see Note 15 - ~~Impairment and Restructuring Charges~~ ~~in our financial statements.~~transformation initiatives.

(2)Represents severance, accelerated depreciation charges, and other expenses directly incurred as a result of restructuring events, including equipment relocation expenses.

(3)Facility closure, consolidation, and other related costs and adjustments primarily related to winding down certain facilities closed in 2022.

(4)M&A related costs consists primarily of legal and professional expenses related to the potential dispositions of Towanda and our Australasia segment.

(5)Represents non-cash equity-based compensation expense related to the issuance of share-based awards.

(6)Non-cash foreign exchange transaction/translation (income)/loss primarily consists of (gains)/losses associated with fair value adjustments of foreign currency derivatives and revaluation of intercompany balances.

(7)Other ~~non-recurring~~special items not core to ongoing business activity ~~include: (i)~~ in the three months ended ~~September 24,~~March 26, 2022 ~~(1) $6,458~~primarily consists of $6.9 million in ~~legal and professional~~ expenses primarily relating to litigation, M&A evaluations, and strategic transformation initiatives, (2) $6,290 in facility closure, consolidation, and other related costs, (3) $3,243 relating primarily to exit costs for executives, and (4) ($2,884) in adjustments related to fire damage and downtime at one of our ~~facilities; (ii)~~facilities in ~~the three months ended September 25, 2021 (1) $357~~our North America segment.

To conform with current period presentation, certain amounts in legal and professional expenses relating primarily to litigation and (2) $1,122 in facility closure, consolidation, startup, and other related costs; (iii) in the nine months ended September 24, 2022 (1) $14,584 in legal and professional expenses, primarily relating to litigation, M&A evaluations, and strategic transformation initiatives, (2) $11,788 in facility closure, consolidation, and other related costs, (3) $3,243 relating primarily to exit costs for executives, (4) $1,898 in compensation and non-income taxes associated with exercises of legacy equity awards, and (5) ($436) in adjustments related to fire damage and downtime at one of our facilities; (iv) in the nine months ended September 25, 2021 (1) $15,702 in legal and professional expenses relating primarily to litigation and (2) $1,905 in facility closure, consolidation, startup, and other related costs.

~~(3)Other non-cash items include $148 and 1,196 for unrealized mark-to-market losses from other derivatives in the three and nine months ended September 24, 2022, respectively.~~prior period information have been reclassified.

Note 12. Capital Stock

Preferred Stock - Our Board of Directors is authorized to issue Preferred Stock from time to time in one or more series and with such rights, privileges, and preferences as the Board of Directors shall from time to time determine. We have not issued any shares of Preferred Stock.

Common Stock - Common Stock includes the basis of shares outstanding plus amounts recorded as additional paid-in capital. Shares outstanding exclude the shares issued to the Employee Benefit Trust that are considered similar to treasury shares and total 193,941 shares at both ~~September 24, 2022~~April 1, 2023 and December 31, ~~2021~~2022 with a total original issuance value of $12.4 million.

We record share repurchases on their trade date and reduce shareholders’ equity and increase accounts payable. Repurchased shares are retired, and the excess of the repurchase price over the par value of the shares is charged to retained earnings.

On July 27, 2021, our Board of Directors increased our previous repurchase authorization to a total of $400.0 million with no expiration date.

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On July 28, 2022, our Board of Directors authorized a new share repurchase program, replacing our previous share repurchase authorization, with an aggregate value of $200.0 million and no expiration date. As of ~~September 24, 2022,~~April 1, 2023, there have been no share repurchases under this program.

~~During the three and nine months ended September 24, 2022, we~~We repurchased ~~1,641,084 and 6,848,356, respectively,~~1,777,266 shares of our Common Stock at an average price of ~~$15.41 and $19.12, respectively. During~~$23.26 during the three ~~and nine~~ months ended ~~September 25, 2021, we repurchased 7,762,169 and 9,749,810~~March 26, 2022. We did not repurchase shares ~~of our Common Stock, respectively, at an average price of $28.48 and $28.51, respectively.~~during the three months ended April 1, 2023.

Note 13. Earnings Per Share

The basic and diluted income ~~(loss)~~ per share calculations were determined based on the following share data:

Three Months Ended Nine Months Ended
September 24, 2022 September 25, 2021 September 24, 2022 September 25, 2021
Weighted average outstanding shares of Common Stock basic 84,519,095 95,783,839 87,121,448 98,562,479
Restricted stock units, performance share units, and options to purchase Common Stock — 2,039,819 895,401 2,068,646
Weighted average outstanding shares of Common Stock diluted 84,519,095 97,823,658 88,016,849 100,631,125

For the three months ended September 24, 2022, we had net losses from operations. As a result, no potentially dilutive securities were included in the denominator for computing diluted loss per share as their inclusion would be antidilutive.


	Three Months Ended
	April 1, 2023	March 26, 2022







Weighted average outstanding shares of Common Stock basic	84,598,945	89,802,974


Restricted stock units and options to purchase Common Stock	550,143	—
Weighted average outstanding shares of Common Stock diluted	85,149,088	89,802,974

The following table provides the securities that could potentially dilute basic earnings per share in the future but were not included in the computation of diluted income per share as their inclusion would be anti-dilutive:

Three Months Ended Nine Months Ended
September 24, 2022 September 25, 2021 September 24, 2022 September 25, 2021
Common Stock options 1,720,071 1,289,635 1,704,101 1,157,780
Restricted stock units 1,585,315 11,123 560,922 9,699
Performance share units 133,684 — 108,933 134,402

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	Three Months Ended
	April 1, 2023	March 26, 2022

Common Stock options	1,669,638	1,668,613

Restricted stock units	782,751	1,086,958
Performance share units	192,940	390,084

Note 14. Stock Compensation

The activity under our incentive plans for the periods presented are reflected in the following tables:

Three Months Ended
September 24, 2022 September 25, 2021
Shares Weighted Average Exercise Price Per Share Shares Weighted Average Exercise Price Per Share
Options granted — $ — — $ —
Options canceled 575,698 $ 26.08 24,434 $ 30.30
Options exercised — $ — 217,409 $ 13.89
Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value
RSUs granted 227,828 $ 14.73 8,046 $ 24.85
PSUs granted — $ — — $ —


		Nine Months Ended							Three Months Ended
		September 24, 2022			September 25, 2021				April 1, 2023			March 26, 2022
		Shares	Weighted Average Exercise Price Per Share		Shares	Weighted Average Exercise Price Per Share			Shares	Weighted Average Exercise Price Per Share		Shares	Weighted Average Exercise Price Per Share
Options granted	Options granted	310,554	$	24.17	309,902	$	29.01	Options granted	235,892	$	13.29	310,554	$	24.17
Options canceled	Options canceled	753,723	$	26.23	50,036	$	29.20	Options canceled	7,395	$	26.33	37,770	$	28.57
Options exercised	Options exercised	156,380	$	11.91	370,982	$	14.35	Options exercised	—	$	—	66,946	$	12.55

		Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value			Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
RSUs granted	RSUs granted	1,367,828	$	21.64	650,655	$	29.10	RSUs granted	1,336,005	$	13.21	845,395	$	24.18

PSUs granted	PSUs granted	158,587	$	29.24	165,749	$	30.70	PSUs granted	292,064	$	17.36	158,587	$	29.24

Stock-based compensation expense was ~~($0.3)~~$4.4 million and ~~$10.9~~$9.7 million for the three ~~and nine~~ months ended ~~September 24,~~April 1, 2023 and March 26, 2022, ~~respectively, and $6.3 million and $20.7 million for~~respectively. The three months ended April 1, 2023 had comparatively less expense than the three ~~and nine~~ months ended ~~September 25, 2021, respectively. The decrease in stock-based compensation expense during the three and nine months ended September 24,~~March 26, 2022 ~~as compared to the respective prior year periods was~~ primarily due to ~~increased forfeitures across all equity awards from the departure of the CEO~~executive management turnover and ~~corporate restructuring during the third quarter 2022, as disclosed~~lower outstanding performance shares in ~~Note 15~~ -~~Impairment and Restructuring Charges~~ ~~in our financial statements.~~2023. As of ~~September 24, 2022,~~April 1, 2023, we had ~~$18.5~~$27.7 million of total unrecognized compensation expense related to non-vested share-based compensation arrangements. This cost is expected to be recognized over the remaining weighted-average vesting period of ~~1.48~~1.85 years.

Note 15. ~~Impairment~~Restructuring and ~~Restructuring~~Asset Related Charges

We engage in restructuring activities ~~intended to improve~~focused on improving productivity and operating ~~margins, and working capital levels.~~margins. Restructuring costs primarily relate to ~~workforce reductions, repositioning of management structure, and~~ costs associated with workforce reductions, plant consolidations and ~~closures.~~closure, and changes to the management structure to align with our operations. Other restructuring associated costs, primarily consist of equipment relocation costs. Asset ~~impairments primarily relate~~related charges consist of accelerated depreciation of assets due to ~~ROU assets and property and equipment held by operations impacted by restructuring.~~changes in asset useful lives.

2322

The following table summarizes the restructuring and ~~impairment~~asset related charges for the periods indicated:

(amounts in thousands) North
America Europe Australasia Corporate
and
Unallocated
Costs Total
Consolidated
Three Months Ended September 24, 2022
Restructuring costs $ 814 $ 3,411 $ 26 $ 2,328 $ 6,579
Impairments — — — — —
Total impairment and restructuring charges $ 814 $ 3,411 $ 26 $ 2,328 $ 6,579
Three Months Ended September 25, 2021
Restructuring costs $ (30) $ (191) $ 77 $ (21) $ (165)
Impairments 144 505 92 — 741
Total impairment and restructuring charges $ 114 $ 314 $ 169 $ (21) $ 576

(amounts in thousands) North
America Europe Australasia Corporate
and
Unallocated
Costs Total
Consolidated
Nine Months Ended September 24, 2022
Restructuring costs 5,565 3,411 79 2,287 11,342
Impairments — 534 — — 534
Total impairment and restructuring charges $ 5,565 $ 3,945 $ 79 $ 2,287 $ 11,876
Nine Months Ended September 25, 2021
Restructuring costs (34) 681 161 (76) 732
Impairments 1,064 760 92 — 1,916
Total impairment and restructuring charges $ 1,030 $ 1,441 $ 253 $ (76) $ 2,648


(amounts in thousands)	North America		Europe		Australasia		Corporate and Unallocated Costs		Total Consolidated
Three Months Ended April 1, 2023
Restructuring charges	$	3,056	$	1,087	$	—	$	187	$	4,330
Other restructuring associated costs	2,585		180		—		—		2,765
Asset related charges	2,171		—		—		—		2,171
Other restructuring associated costs and asset related charges	4,756		180		—		—		4,936
Total restructuring and asset related charges	$	7,812	$	1,267	$	—	$	187	$	9,266

The following is a summary of the restructuring accruals recorded and charges incurred:

(amounts in thousands) September 24, 2022 September 25, 2021
Balance as of January 1 $ 171 $ 1,377
Current period charges 11,342 732
Payments (6,396) (1,653)
Currency translation (183) (50)
Balance at period end $ 4,934 $ 406


(amounts in thousands)
Balance as of January 1, 2023	$	5,038
Current period charges	6,915

Payments	(8,018)
Currency translation	50
Balance as of April 1, 2023	$	3,985

Restructuring accruals are expected to be paid within the next 12 months and are included within accrued expenses and other current liabilities in the consolidated balance sheet.

Restructuring accruals recorded and charges incurred in the three months ended March 26, 2022 were immaterial.

On January 26, 2023, we announced to employees a restructuring plan to close a manufacturing facility in Atlanta, Georgia in a continuing effort to optimize the Company’s footprint and drive operational efficiencies (the “Plan”). The Company expects to incur pre-tax restructuring expenses, other closure costs and capital spending of approximately $19.3 million, which includes $3.0 million of capital expenditures, in connection with the Plan. Through April 1, 2023, $8.1 million has been expensed in connection with the Plan, primarily relating to accelerated depreciation and amortization, equipment relocation costs, and restructuring severance costs. The Company expects to incur a total pre-tax cash outlay of approximately $15.0 million by the end of the third quarter of 2023 in connection with the Plan, of which $3.2 million of cash outlay has been incurred as of April 1, 2023.

2423

Note 16. Held for Sale

During 2021, the Company ceased the appeal process for its litigation with Steves & Sons, Inc. (“Steves”) further described in Note 20 - Commitments and Contingencies. As a result, we are required to divest the Company’s Towanda, PA operations (“Towanda”). As of ~~September 24, 2022~~April 1, 2023 and December 31, ~~2021,~~2022, the assets and liabilities associated with the sale of Towanda qualify as held for sale. Since the Company will continue manufacturing door skins for its internal needs, the divestiture decision did not represent a strategic shift thereby precluding the divestiture as qualifying as a discontinued operation.

The assets and liabilities included within the summary below are expected to be disposed of within the next twelve months and are included in assets held for sale and liabilities held for sale in the accompanying balance sheet. The results of Towanda will continue to be reported within our North America operations until the divestiture is finalized.

In addition to Towanda, we have immaterial assets held for sale at points in time, primarily relating to property, plant and equipment from restructuring efforts, which have been classified as held for sale as of December 31, 2021.


(amounts in thousands)	(amounts in thousands)	September 24, 2022		December 31, 2021		(amounts in thousands)	April 1, 2023		December 31, 2022
Assets	Assets					Assets
Inventory	Inventory	$	17,582	$	15,520	Inventory	$	16,749	$	16,592
Other current assets	Other current assets	156		105		Other current assets	192		110
Property and equipment	Property and equipment	39,243		35,870		Property and equipment	44,271		41,600
Intangible assets	Intangible assets	1,471		1,471		Intangible assets	1,472		1,471
Goodwill	Goodwill	65,000		65,000		Goodwill	65,000		65,000
Operating lease assets	Operating lease assets	1,138		1,458		Operating lease assets	850		975
Assets held for sale	Assets held for sale	$	124,590	$	119,424	Assets held for sale	$	128,534	$	125,748

Liabilities	Liabilities					Liabilities
Accrued payroll and benefits	Accrued payroll and benefits	$	1,091	$	907	Accrued payroll and benefits	$	983	$	852
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	6,064		3,945		Accrued expenses and other current liabilities	5,363		4,707
Current maturities of long term debt	Current maturities of long term debt	3		10		Current maturities of long term debt	—		1
Long-term debt		—		2

Operating lease liability	Operating lease liability	616		1,004		Operating lease liability	341		480
Liabilities held for sale	Liabilities held for sale	$	7,774	$	5,868	Liabilities held for sale	$	6,687	$	6,040

Note 17. Other Income, Net

The table below summarizes the amounts included in other income, net in the accompanying ~~unaudited~~ consolidated statements of operations:

Three Months Ended Nine Months Ended
(amounts in thousands) September 24, 2022 September 25, 2021 September 24, 2022 September 25, 2021
Foreign currency gains $ (3,301) $ (3,195) $ (8,686) $ (12,131)
Insurance Reimbursement (1,500) — (6,343) —
Pension income (1,348) (34) (4,210) (110)
Recovery of cost from interest received on impaired notes (541) — (13,953) —
Loss on sale or disposal of property and equipment 76 561 265 923
Governmental pandemic assistance reimbursement (71) (828) (550) (1,327)
Loss on extinguishment of debt — 1,342 — 1,342
Other items (1,005) (1,097) (2,437) (2,637)
Total other income $ (7,690) $ (3,251) $ (35,914) $ (13,940)


	Three Months Ended
(amounts in thousands)	April 1, 2023		March 26, 2022
Foreign currency (gains) losses, net	$	(3,459)	$	1,711
Insurance reimbursement	(1,215)		—
Pension expense (income)	1,788		(1,427)
Recovery of cost from interest received on impaired notes	(1,394)		(7,027)

Governmental assistance	(147)		(65)




Other items	(845)		(529)


Total Other Income, Net	$	(5,272)	$	(7,337)

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Note ~~18.~~18 Derivative Financial Instruments

Foreign currency derivatives – WeAs a multinational corporation, we are exposed to the impact of foreign currency fluctuations in certain countries in which we operate. In most of these countries, the exposure to foreign currency movements is limited because the operating revenues and expenses of our business units are substantially denominated in the local currency.fluctuations. To the extent borrowings, sales, purchases, or other transactions are not executed in the local currency of the operating unit, we are exposed to foreign currency risk. In ~~addition,~~most of the countries in which we operate, the exposure to foreign currency movements is limited because the operating revenues and expenses of our business units are substantially denominated in the local currency. To mitigate the exposure, we may enter into a variety of foreign currency derivative ~~contracts, such as forward contracts, option collars, and cross-currency hedges.~~contracts. To manage the effect of exchange fluctuations on forecasted sales, purchases, acquisitions, ~~inventory,~~ capital expenditures,

and certain intercompany transactions that are denominated in foreign currencies, we have foreign currency derivative contracts with a total notional amount of ~~$99.9 million.~~$97.3 million as of April 1, 2023. We also are subject to currency translation risk associated with converting our foreign operations’ financial statements into U.S. dollars. To mitigate the impact to the consolidated earnings of the Company from the effect of the translation of certain subsidiaries’ local currency results into U.S. dollars, we have foreign currency derivative contracts with a total notional amount of ~~$94.8 million.~~$112.1 million as of April 1, 2023. We do not use derivative financial instruments for trading or speculative purposes. WeAs of April 1, 2023, we have not elected hedge accounting for any foreign currency derivative contracts. We record mark-to-market changes in the values of these derivatives in other ~~income.~~income, net. We recorded mark-to-market gains of $1.5 million and losses of $1.3 million relating to foreign currency derivatives ~~of $3.3 million~~ in the three months ended ~~September 24,~~April 1, 2023 and March 26, 2022, ~~and gains of $7.7 million in the nine months ended September 24, 2022, respectively, and gains of $3.0 million and $8.8 million in the three and nine months ended September 25, 2021,~~ respectively.

Interest rate derivatives – We are exposed to interest rate risk in connection with our variable rate long-term debt and we partially mitigate this risk through interest rate derivatives such as swaps and caps. In May 2020, we entered into interest rate swap agreements to manage this risk. The interest rate ~~swaps~~swap agreements have outstanding notional amounts aggregating to $370.0 million and mature in December 2023 with a weighted average fixed rate of 0.395% swapped against one-month USD LIBOR floored at 0.00%. Absent any action, interest rate hedges will convert to a SOFR basis after June 30, 2023, although the Company plans to proactively amend these hedges to a SOFR basis prior to that date. The interest rate swap agreements are designated as cash flow hedges and effectively fix the interest rate on a corresponding portion of the aggregate debt outstanding under our Term Loan Facility.

No portion of these interest rate contracts were deemed ineffective during the three ~~and nine~~ months ended ~~September 24, 2022.~~April 1, 2023. We recorded pre-tax mark-to-market ~~gains~~lossesof ~~$4.8~~$0.3 million and ~~$17.1~~gains of $8.9 million during the three ~~and nine~~ months ended ~~September 24,~~April 1, 2023 and March 26, 2022, respectively, in other comprehensive income. We recorded pre-tax mark-to-market losses of $0.1 million and pre-tax mark-to-market gains of $1.3 million during the three and nine months ended September 25, 2021, respectively, in other comprehensive income. We reclassified gains previously recorded in other comprehensive income to interest income of ~~$1.6 million and $1.7~~$3.8 million during the three ~~and nine~~ months ended ~~September 24, 2022, respectively,~~April 1, 2023, and losses to interest expense of $0.2 million ~~and $0.7 million~~ during the three ~~and nine~~ months ended ~~September 25, 2021, respectively.~~March 26, 2022.

As of ~~September 24, 2022,~~April 1, 2023, approximately ~~$14.8~~$12.1 million is expected to be reclassified to interest income ~~over~~until the ~~next twelve months.~~instruments mature in December 2023.

Other derivative instruments – From time to time, we may enter into other types of derivative instruments immaterial to the business. Unless otherwise disclosed, these instruments are not designated as hedging instruments and mark-to-market adjustments are recorded in the statement of operations each period.

The derivative agreements each contain a provision whereby we could be declared in default on our derivative obligations if we either default or, in certain cases, are capable of being declared in default of any of our indebtedness greater than specified thresholds. These agreements also contain a provision where we could be declared in default subsequent to a merger or restructuring type event if the creditworthiness of the resulting entity is materially weaker.

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~~The~~ fair values of derivative instruments held are as follows:


		Derivative assets						Derivative assets
(amounts in thousands)	(amounts in thousands)	Balance Sheet Location	September 24, 2022		December 31, 2021		(amounts in thousands)	Balance Sheet Location	April 1, 2023		December 31, 2022
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:						Derivatives designated as hedging instruments:
Interest rate contracts	Interest rate contracts	Other current assets	$	13,705	$	263	Interest rate contracts	Other current assets	$	12,101	$	16,235
Interest rate contracts		Other assets	$	4,958	$	3,036

Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:						Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Foreign currency forward contracts	Other current assets	$	10,531	$	6,297	Foreign currency forward contracts	Other current assets	$	4,472	$	3,809
Other derivative instruments							Other derivative instruments	Other current assets	55		73

Derivatives liabilities

(amounts in thousands)

Balance Sheet Location

September 24, 2022

December 31, 2021

(amounts in thousands)

Balance Sheet Location

April 1, 2023

December 31, 2022

Derivatives not designated as hedging instruments:

Foreign currency forward contracts

Accrued expenses and other current liabilities

2,218

5,527

Foreign currency forward contracts

Accrued expenses and other current liabilities

2,174

3,058

Other derivative instruments

Accrued expenses and other current liabilities

1,196

—

Other derivative instruments

Accrued expenses and other current liabilities

190

288

Note 19. Fair Value of Financial Instruments

We record financial assets and liabilities at fair value based on FASB guidance related to fair value measurements. The guidance requires fair value to be determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Three levels of inputs may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Quoted market-based inputs or unobservable inputs that are corroborated by market data.

Level 3 – Unobservable inputs that are not corroborated by market data.

The recorded carrying amounts and fair values of these instruments were as follows:


		September 24, 2022										April 1, 2023
(amounts in thousands)	(amounts in thousands)	Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3			(amounts in thousands)	Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3
Assets:	Assets:												Assets:
Cash equivalents	Cash equivalents	$	3,608	$	3,608	$	—	$	3,608	$	—		Cash equivalents	$	1,714	$	1,714	$	—	$	1,714	$	—
Derivative assets, recorded in other current assets	Derivative assets, recorded in other current assets	24,236		24,236		—		24,236		—			Derivative assets, recorded in other current assets	16,628		16,628		—		16,628		—
Derivative assets, recorded in other assets		4,958		4,958		—		4,958		—

Deferred compensation plan assets, recorded in other assets													Deferred compensation plan assets, recorded in other assets	1,157		1,157		—		1,157		—

Liabilities:	Liabilities:												Liabilities:
Debt, recorded in long-term debt and current maturities of long-term debt	Debt, recorded in long-term debt and current maturities of long-term debt	$	1,826,770	$	1,602,016	$	—	$	1,602,016	$	—		Debt, recorded in long-term debt and current maturities of long-term debt	$	1,761,191	$	1,657,803	$	—	$	1,657,803	$	—

Derivative liabilities, recorded in accrued expenses and other current liabilities	Derivative liabilities, recorded in accrued expenses and other current liabilities	3,414		3,414		—		3,414		—			Derivative liabilities, recorded in accrued expenses and other current liabilities	2,364		2,364		—		2,364		—

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		December 31, 2021										December 31, 2022
(amounts in thousands)	(amounts in thousands)	Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3			(amounts in thousands)	Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3
Assets:	Assets:												Assets:
Cash equivalents	Cash equivalents	$	33,143	$	33,143	$	—	$	33,143	$	—		Cash equivalents	$	6,078	$	6,078	$	—	$	6,078	$	—
Derivative assets, recorded in other current assets	Derivative assets, recorded in other current assets	6,560		6,560		—		6,560		—			Derivative assets, recorded in other current assets	20,117		20,117		—		20,117		—

Deferred compensation plan assets, recorded in other assets													Deferred compensation plan assets, recorded in other assets	725		725		—		725		—

Liabilities:	Liabilities:												Liabilities:
Debt, recorded in long-term debt and current maturities of long-term debt	Debt, recorded in long-term debt and current maturities of long-term debt	$	1,720,883	$	1,751,353	$	—	$	1,751,353	$	—		Debt, recorded in long-term debt and current maturities of long-term debt	$	1,759,226	$	1,555,367	$	—	$	1,555,367	$	—
Derivative liabilities, recorded in accrued expenses and other current assets	Derivative liabilities, recorded in accrued expenses and other current assets	5,527		5,527		—		5,527		—			Derivative liabilities, recorded in accrued expenses and other current assets	3,346		3,346		—		3,346		—
Derivative liabilities, recorded in deferred credits and other liabilities		—		—		—		—		—

Derivative assets and liabilities reported in level 2 primarily include foreign currency derivative contracts and interest rate ~~contracts.~~swap agreements. See Note 18- Derivative Financial Instruments for additional information about our derivative assets and liabilities.

Deferred compensation plan assets reported in level 2 consist of mutual funds.

There are no material non-financial assets or liabilities as of ~~September 24, 2022~~April 1, 2023 or December 31, ~~2021.~~2022.

Note 20. Commitments and Contingencies

Litigation – We are involved in various legal proceedings, claims, and government audits arising in the ordinary course of business. We record our best estimate of a loss when the loss is considered probable and the amount of such loss can be reasonably estimated. When a loss is probable and there is a range of estimated loss with no best estimate within the range, we record the minimum estimated liability related to the lawsuit or claim. As additional information becomes available, we reassess the potential liability and revise our accruals, if necessary. Because of uncertainties related to the resolution of lawsuits and claims, the ultimate outcome may differ materially from our estimates.

Other than the matters described below, there were no proceedings or litigation matters involving the Company or its property as of ~~September 24, 2022~~April 1, 2023 that we believe would have a material adverse effect on our consolidated financial position or cash flows, although they could have a material adverse effect on our operating results for a particular reporting period.

Steves & Sons, Inc. vs JELD-WEN, Inc. – We sell molded door skins to certain customers pursuant to long-term contracts, and these customers in turn use the molded door skins to manufacture interior doors and compete directly against us in the marketplace. We gave notice of termination of one of these contracts and, on June 29, 2016, the counterparty to the agreement, Steves and Sons, Inc. (“Steves”) filed a claim against JWI in the U.S. District Court for the Eastern District of Virginia, Richmond Division (the “Eastern District of Virginia”). The complaint alleged that our acquisition of CMI, a competitor in the molded door skins market, together with subsequent price increases and other alleged acts and omissions, violated antitrust laws, and constituted a breach of contract and breach of warranty. Specifically, the complaint alleged that our acquisition of CMI substantially lessened competition in the molded door skins market. The complaint sought

declaratory relief, ordinary and treble damages, and injunctive relief, including divestiture of certain assets acquired in the CMI acquisition.

In February 2018, a jury in the Eastern District of Virginia returned a verdict that was unfavorable to JWI with respect to Steves’ claims that our acquisition of CMI violated Section 7 of the Clayton Act, and found that JWI breached the supply agreement between the parties (the “Original Action”). The verdict awarded Steves $12.2 million for past damages under both the Clayton Act and breach of contract claims and $46.5 million in future lost profits under the Clayton Act claim.

During the course of the proceedings in the Eastern District of Virginia, we discovered certain facts that led us to conclude that Steves, its principals, and certain former employees of the Company had misappropriated Company trade secrets, violated the terms of various agreements between the Company and those parties, and violated other laws. On May 11, 2018, a jury in the Eastern District of Virginia returned a verdict on our trade secrets claims against Steves and awarded damages in the amount of $1.2 million. The presiding judge entered a judgment in our favor for those damages, and the entire amount has been paid by Steves. On August 16, 2019, the presiding judge granted Steves’ request for an injunction, prohibiting us from pursuing certain claims against individual defendants pending in Bexar County, Texas (the “Steves Texas Trade Secret Theft Action”). On September 11, 2019, JELD-WEN filed a notice of appeal of the Eastern District of Virginia’s injunction to the Fourth Circuit Court of Appeals (the “Fourth Circuit”).

On March 13, 2019, the presiding judge entered an Amended Final Judgment Order in the Original Action, awarding $36.5 million in past damages under the Clayton Act (representing a trebling of the jury’s verdict) and granting divestiture of

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certain assets acquired in the CMI acquisition, subject to appeal. The judgment also conditionally awarded damages in the event the judgment was overturned on appeal. Specifically, the court awarded $139.4 million as future antitrust damages in the event the divestiture order was overturned on appeal and $9.9 million as past contract damages in the event both the divestiture and antitrust claims were overturned on appeal.

On April 12, 2019, Steves filed a petition requesting an award of its fees and a bill of costs, seeking $28.4 million in attorneys’ fees and $1.7 million in costs in connection with the Original Action. On November 19, 2019, the presiding judge entered an order for further relief awarding Steves an additional $7.1 million in damages for pricing differences from the date of the underlying jury verdict through May 31, 2019 (the “Pricing Action”). We also appealed that ruling. On April 14, 2020, Steves filed a motion for further supplemental relief for pricing differences from the date of the prior order and going forward through the end of the parties’ current supply agreement (the “Future Pricing Action”). We opposed that request for further relief.

JELD-WEN filed a supersedeas bond and notice of appeal of the judgment, which was heard by the Fourth Circuit on May 29, 2020. On February 18, 2021, the Fourth Circuit issued its decision on appeal in the Original Action, affirming the Amended Final Judgment Order in part and vacating and remanding in part. The Fourth Circuit vacated the Eastern District of Virginia’s alternative $139.4 million lost-profits award, holding that award was premature because Steves has not suffered the purported injury on which its claim for future lost profits rests. The Fourth Circuit also vacated the Eastern District of Virginia’s judgment for Sam Steves, Edward Steves, and John Pierce on JELD-WEN’s trade secrets claims. The Fourth Circuit affirmed the Eastern District of Virginia’s finding of antitrust injury and its award of $36.5 million in past antitrust damages. It also affirmed the Eastern District of Virginia’s divestiture order, while clarifying that JELD-WEN retains the right to challenge the terms of any divestiture, including whether a sale to any particular buyer will serve the public interest, and made clear that the Eastern District of Virginia may need to revisit its divestiture order if the special master who has been appointed by the presiding judge cannot locate a satisfactory buyer. JELD-WEN then filed a motion for rehearing en banc with the Fourth Circuit that was denied on March 22, 2021.

Following a thorough review, and consistent with our practice, we concluded that it is in the best interest of the Company and its stakeholders to move forward with the divestiture of Towanda and certain related assets. Although the Company did not seek Supreme Court review of the Fourth Circuit’s February 18, 2021 decision, the Company retains the legal right to challenge the divestiture process and the final divestiture order. We made estimates related to the divestiture in the preparation of our financial statements; however, there can be no guarantee that the divestiture will be consummated. The divestiture process is ongoing, and the special master is overseeing this process. Although the Company has decided to divest, we continue to believe that Steves’ claims lacked merit and that it was not entitled to the extraordinary remedy of divestiture. We continue to believe that the judgment in accordance with the verdict was improper under applicable law.

During the pendency of the Original Action, on February 14, 2020, Steves filed a complaint and motion for preliminary injunction in the Eastern District of Virginia alleging that we breached the long-term supply agreement between the parties, including, among other claims, by incorrectly calculating the allocation of door skins owed to Steves (the “Allocation Action”). Steves sought an additional allotment of door skins and damages for violation of antitrust laws, tortious interference, and breach of contract. On April 10, 2020, the presiding judge granted Steves’ motion for preliminary injunction, and the parties settled the issues underlying the preliminary injunction on April 30, 2020 and the Company reserved the right to appeal the ruling in the Fourth Circuit. The Company believed all the claims lacked merit and moved to dismiss the antitrust and tortious interference claims.

On June 2, 2020, we entered into a settlement agreement with Steves to resolve the Pricing Action, the Future Pricing Action, and the Allocation Action. As a result of the settlement, Steves filed a notice of satisfaction of judgment in the Pricing Action, withdrew its Future Pricing Action with prejudice, and filed a stipulated dismissal with prejudice in the Allocation Action. The Company also withdrew its appeal of the Pricing Action. The parties agreed to bear their own respective attorneys’ fees and costs in these actions. In partial consideration of the settlement, JWI and Steves entered into an amended supply agreement satisfactory to both parties that, by its terms, ended on September 10, 2021. This settlement had no effect on the Original Action between the parties except to agree that certain specific terms of the Amended Final Judgment Order in the Original Action would apply to the amended supply agreement during the pendency of the appeal of the Original Action. On April 2, 2021, JWI and Steves filed a stipulation regarding the amended supply agreement in the Original Action, stating that regardless of whether the case remains on appeal as of September 10, 2021, and absent further order of the court, the amended supply agreement would be extended until the divestiture of Towanda and certain related assets is complete and Steves’ new supply agreement with the company that acquires Towanda is in effect.

We continue to believe the claims in the settled actions lacked merit and made no admission of liability in these matters.

On October 7, 2021, we entered into a settlement agreement with Steves to resolve the following: (i) Steves’ past and any future claims for attorneys’ fees, expenses, and costs in connection with the Original Action, except that Steves and JWI each reserved the right to seek attorneys’ fees arising out of any challenge of the divestiture process or the final divestiture order; (ii) the Steves Texas Trade Secret Theft Action and the related Fourth Circuit appeal of the Eastern District of Virginia’s injunction in the Original Action; (iii) the past damages award in the Original Action; and (iv) any and all claims

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and counterclaims, known or unknown, that were asserted or could have been asserted against each other from the beginning of time through the date of the settlement agreement. As a result of the settlement, the parties filed a stipulated notice of satisfaction of the past antitrust damages judgment and a stipulated notice of settlement of Steves’ claim for attorneys’ fees, expenses, and costs against JWI in the Original Action, and Steves filed a notice of withdrawal of its motion for attorneys’ fees and expenses and bill of costs in the Original Action. The Company also filed a notice of dismissal with prejudice and agreed to take no judgment in the Steves Texas Trade Secret Theft Action, and the parties filed a joint agreement for dismissal of the injunction appeal in the Fourth Circuit. On November 3, 2021, we paid $66.4 million to Steves under the settlement agreement.

Cambridge Retirement System v. JELD-WEN Holding, Inc., et al. – On February 19, 2020, Cambridge Retirement System filed a putative class action lawsuit in the Eastern District of Virginia against the Company, current and former Company executives, and various Onex-related entities alleging violations of Section 10(b) and Rule 10b-5 of the Exchange Act, as well as violations of Section 20(a) of the Exchange Act against the individual defendants and Onex-related entities (“Cambridge”). The lawsuit sought compensatory damages, equitable relief, and an award of attorneys’ fees and costs. On May 8, 2020, the Public Employees Retirement System of Mississippi and the Plumbers and Pipefitters National Pension Fund were named as co-lead plaintiffs and filed an amended complaint on June 22, 2020.

On April 20, 2021, the parties reached an agreement in principle to resolve this securities class action. The agreement contemplated a full release of claims through the date of preliminary court approval of the settlement in exchange for a payment of $39.5 million, primarily funded by the Company’s D&O insurance carriers, except $5.0 million which was provisionally funded by the Company and remains subject to dispute with insurance carriers. On November 22, 2021, the Court granted final approval of the settlement agreement. The deadline to appeal the entry of the final approval order and judgment was December 22, 2021, and no party or class member filed an appeal. The Company continues to believe that the plaintiffs’ claims lacked merit and has denied any liability or wrongdoing for the claims made against the Company.

In re JELD-WEN Holding, Inc. Derivative Litigation – On February 2, 2021, Jason Aldridge, on behalf of the Company, filed a derivative action in the U.S. District Court for the District of Delaware against certain current and former executives and directors of the Company, alleging that the individual defendants breached their fiduciary duties by allowing the wrongful acts alleged in the Steves and Cambridge actions, as well as violations of Section 14(a) and 20(a) of the Exchange Act, unjust enrichment, and waste of corporate assets among other allegations (the “Aldridge Action”). The lawsuit ~~seeks~~sought compensatory damages, equitable relief, and an award of attorneys’ fees and costs. The parties sought a stay of the Aldridge Action. On April 19, 2021, the court denied the parties’ motion to stay and, instead, ordered the plaintiff to file an amended complaint that complied with court rules or the matter would be dismissed. The plaintiff filed an amended complaint on May 10, 2021.

On June 21, 2021, prior to a response from the Company in the Aldridge Action, Shieta Black and the Board of Trustees of the City of Miami General Employees’ & Sanitation Employees’ Retirement Trust, on behalf of the Company, filed a derivative action in the U.S. District Court for the District of Delaware against certain current and former executives and directors of the Company and Onex Corporation (“Onex”), alleging that the defendants breached their fiduciary duties by allowing the wrongful acts alleged in the Steves and Cambridge actions, as well as insider trading, and unjust enrichment among other allegations (the “Black Action”). The lawsuit ~~seeks~~sought compensatory damages, corporate governance reforms, restitution, equitable relief, and an award of attorneys’ fees and costs. The ~~plaintiffs in~~court granted the Black and Aldridge ~~Actions sought~~plaintiffs in motion to consolidate the lawsuits on July 16, 2021, which was granted by the court on the same day. On August 16, 2021, the plaintiffs designated the Black complaint as the operative complaint in the consolidated derivative action. On October 15, 2021, JELD-WEN and Onex moved2021.

Back to dismiss the complaint. On January 14, 2022, the plaintiffs moved for leave to amend the complaint. On January 28, 2022, the JELD-WEN defendants opposed the motion for leave to amend the complaint. On April 28, 2022, the court granted the plaintiffs leave to amend the complaint, and the plaintiffs filed their amended complaint the same day. As a result, on April 29, 2022, the Court denied JELD-WEN’s and Onex’s motions to dismiss as moot.top

On June 20, 2022, the parties ~~executed~~entered into a settlement ~~term sheet pertaining to~~agreement of the ~~derivative litigation and notified~~consolidated matters, which was approved by the Court ~~that a settlement had been reached. On June 22, 2022, the Court stayed the derivative litigation pending~~on approval of the ~~settlement. On September 8,~~December 20, 2022, and the ~~parties executed a stipulation and agreement~~cases were dismissed with prejudice. As part of ~~settlement. The Court entered an order preliminarily approving~~ the settlement, the Company, as putative plaintiff, received approximately $10.5 million after attorneys’ fees and costs were deducted in January 2023.

In re Interior Molded Doors Antitrust Litigation – On October 19, 2018, Grubb Lumber Company, on behalf of itself and others similarly situated, filed a putative class action lawsuit against us and one of our competitors in the doors market, Masonite Corporation (“Masonite”), in the Eastern District of Virginia. We subsequently received additional complaints from and on behalf of direct and indirect purchasers of interior molded doors. The suits were consolidated into two separate actions, a Direct Purchaser Action and an Indirect Purchaser Action. The suits alleged that Masonite and JELD-WEN violated Section 1 of the Sherman Act, and in the Indirect Purchaser Action, related state law antitrust and consumer protection laws, by engaging in a scheme to artificially raise, fix, maintain, or stabilize the prices of interior molded doors in the United States. The complaints sought ordinary and treble damages, declaratory relief, interest, costs, and attorneys’ fees.

On August 31, 2020, JELD-WEN and Masonite entered into a settlement agreement with the putative Direct Purchaser

class to resolve the Direct Purchaser Action. Each defendant agreed to pay a total of $30.8 million to the named plaintiffs and the settlement class in exchange for a full release of claims through the date of preliminary approval of the revised settlement, which the court granted on February 5, 2021. In addition, on September ~~11, 2022,~~4, 2020, JELD-WEN and ~~scheduled~~Masonite entered into a separate settlement agreement with the putative Indirect Purchaser class to resolve the Indirect Purchaser Action. Each defendant agreed to pay $9.75 million to the named plaintiffs and the settlement class in exchange for a full release of claims through the execution date of the settlement agreement. The final fairness hearing in the Direct Purchaser Action was held on June 2, 2021, and the court entered a final approval order and judgment on June 3, 2021. On June 17, 2021, the Company made the settlement payment to the named plaintiffs and the settlement class in the Direct Purchaser Action. The deadline to appeal the entry of the final approval order and judgment was July 7, 2021, and no party or class member filed an appeal. The final fairness hearing ~~for December 19, 2022. Notice~~in the Indirect Purchaser Action was held on July 26, 2021 and the court issued a final approval order and judgment on July 27, 2021. On August 10, 2021, the Company made the settlement payment to the named plaintiffs and the settlement class in the Indirect Purchaser Action. The deadline to appeal the entry of the ~~settlement~~final approval order and ~~schedule~~judgment was August 26, 2021, and no party or class member filed an appeal. The Company continues to believe that the plaintiffs’ claims lacked merit and has ~~been posted on~~denied any liability or wrongdoing for the ~~Company’s website and is being mailed to shareholders as specified in~~claims made against the ~~Court’s preliminary approval order.~~Company.

Canadian Antitrust Litigation – On May 15, 2020, Développement Émeraude Inc., on behalf of itself and others similarly situated, filed a putative class action lawsuit against usthe Company and Masonite in the Superior Court of the Province of Quebec, Canada, which was served on us on September 18, 2020 (“the Quebec Action”). The putative class consists of any person in Canada who, since October 2012, purchased one or more interior molded doors from usthe Company or Masonite. The suit alleges an illegal conspiracy between usthe Company and Masonite to agree on prices, the distribution of market shares and/or the production levels of interior molded doors and that the plaintiffs suffered damages in that they were charged and paid higher prices for interior molded doors than they would have had to pay but for the alleged anti-competitive conduct. The plaintiffs are seeking compensatory and punitive damages, attorneys’ fees and costs. On September 9, 2020, Kate O’Leary Swinkels, on behalf of herself and others similarly situated, filed a putative class action against ~~JELD-WEN~~the Company and Masonite in the Federal Court of Canada, which was served on us on September 29, 2020 (the “Federal Court Action”). The Federal Court Action makes substantially similar allegations to the Quebec Action and the putative class is represented by the same counsel. In February 2021, the plaintiff in the Federal Court Action issued a proposed Amended Statement of Claim that replaced the named plaintiff, Kate O’Leary Swinkels, with David Regan. The plaintiff has sought a stay of the Quebec Action while the Federal Court Action proceeds. We anticipate a hearing on the certification of the Federal Court Action in 2023. The Company believes both the Quebec Action and the Federal Court Action lack merit and intends to vigorously defend against them.

We have evaluated the claims against us and recorded provisions based on management’s judgment about the probable outcome of the litigation and have included our estimates in accrued expenses in the accompanying balance sheets. See Note 7 - Accrued Expenses and Other Current Liabilities. While we expect a favorable resolution to these matters, the dispute resolution process could be lengthy, and if the plaintiffs were to prevail completely or substantially in the

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respective matters described above, such an outcome could have a material adverse effect on our operating results, consolidated financial position, or cash flows.

Self-Insured Risk – We self-insure substantially all of our domestic business liability risks including general liability, product liability, warranty, personal injury, auto liability, workers’ compensation, and employee medical benefits. Excess insurance policies from independent insurance companies generally cover exposures between $5.0 million and $200.0 million for domestic product liability risk and exposures between $3.0 million and $200.0 million for auto, general liability, personal injury, and workers’ compensation. We have no stop loss insurance covering our self-insured employee medical plan and are responsible for all claims thereunder. We estimate our provision for self-insured losses based upon an evaluation of current claim exposure and historical loss experience. Actual self-insurance losses may vary significantly

from these estimates. At ~~September 24, 2022~~April 1, 2023 and December 31, ~~2021,~~2022, our accrued liability for self-insured risks was ~~$92.1~~$92.0 million and ~~$88.4~~$92.6 million, respectively.

Indemnifications – At ~~September 24, 2022,~~April 1, 2023, we had commitments related to certain representations made in contracts for the purchase or sale of businesses or property. These representations primarily relate to past actions such as responsibility for transfer taxes if they should be claimed, and the adequacy of recorded liabilities, warranty matters, employment benefit plans, income tax matters, or environmental exposures. These guarantees or indemnification responsibilities typically expire within one to three years. We are not aware of any material amounts claimed or expected to be claimed under these indemnities. From time to time and in limited geographic areas, we have entered into agreements for the sale of our products to certain customers that provide additional indemnifications for liabilities arising from construction or product defects. We cannot estimate the potential magnitude of such exposures, but to the extent specific liabilities have been identified related to product sales, liabilities have been provided in the warranty accrual in the accompanying consolidated balance sheets.

Other Financing Arrangements – At times we are required to provide letters of credit, surety bonds, or guarantees to meet various performance, legal, warranty, environmental, workers compensation, licensing, utility, and governmental requirements. Stand-by letters of credit are provided to certain customers and counterparties in the ordinary course of business as credit support for contractual performance guarantees, advanced payments received from customers, and future funding commitments. The stated values of these letters of credit agreements, surety bonds, and guarantees were ~~$72.3 million and $116.9~~$67.6 million at ~~September 24, 2022~~April 1, 2023 and December 31, ~~2021,~~2022, respectively. ~~The decrease is primarily due to the cancellation of bonds related to the Steves’ legal matter.~~

Environmental Contingencies – We periodically incur environmental liabilities associated with remediating our current and former manufacturing sites as well as penalties for not complying with environmental rules and regulations. We record a liability for remediation costs when it is probable that we will be responsible for such costs and the costs can be reasonably estimated. These environmental liabilities are estimated based on current available facts and current laws and regulations. Accordingly, it is likely that adjustments to the estimated liabilities will be necessary as additional information becomes available. Short-term environmental liabilities and settlements are recorded in accrued expenses and other current liabilities in the accompanying consolidated balance sheets and totaled $0.5 million at ~~September 24, 2022~~April 1, 2023 and $0.5 million at December 31, ~~2021.~~2022. Long-term environmental liabilities are recorded in deferred credits and other liabilities in the accompanying consolidated balance sheets and totaled $11.8 million at ~~September 24, 2022~~April 1, 2023 and December 31, ~~2021.~~2022, respectively.

Everett, Washington WADOE Action – In 2007, we were identified by the WADOE as a PLP with respect to our former manufacturing site in Everett, Washington. In 2008, we entered into an Agreed Order with the WADOE to assess historic environmental contamination and remediation feasibility at the site. As part of the order, we agreed to develop a CAP, arising from the feasibility assessment. In December 2020, we submitted to the WADOE a draft feasibility assessment with an array of remedial alternatives, which we considered substantially complete. During 2021, several comment rounds were completed as well as the identification of the Port of Everett and W&W Everett Investment LLC as additional PLPs, with respect to this matter with each PLP being jointly and severally liable for the cleanup costs. The WADOE received the final feasibility assessment on December 31, 2021, containing various remedial alternatives with its preferred remedial alternatives totaling $23.4 million. Based on this study, we have determined our range of possible outcomes to be $11.8 million to $33.4 million. On March 1, 2022, we delivered a draft CAP to the WADOE consistent with its preferred alternatives, and on May 16, 2022, we received the WADOE’s initial comments on the draft CAP. On June 13, 2022, we responded to the WADOE’s ~~comments. The~~comments, and on October 19, 2022, the WADOE ~~continues reviewing~~identified Wick Family Properties as another PLP. On December 19, 2022, the WADOE provided the draft CAP to the Company and ~~will provide comments that will be incorporated into~~other PLPs. After further negotiation, the ~~draft CAP. At that time, the WADOE will release the documents for tribal consultation and comment followed by a public comment period. The~~ final CAP will ultimately be formalized in an Agreed Order or Consent Decree with the WADOE, the Company, and the other PLPs. We have made provisions within our financial statements within the range of possible outcomes; however, the contents and cost of the final CAP and allocation of the responsibility between the identified PLPs could vary materially from our estimates.

Towanda, Pennsylvania Consent Order – In December 2020, we entered into a COA with the PaDEP to remove a pile of wood fiber waste from our site in Towanda, Pennsylvania, which we acquired in connection with our acquisition of CMI in

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2012, by using it as fuel for a boiler at that site. The COA replaced a 2018 Consent Decree between PaDEP and us. Under the COA, we are required to achieve certain periodic removal objectives and ultimately remove the entire pile by August 31, 2025. There are currently ~~$2.3~~$1.4 million in bonds posted in connection with these obligations. If we are unable to remove this pile by August 31, 2025, then the bonds will be forfeited, and we may be subject to penalties by PaDEP. We currently anticipate meeting all applicable removal deadlines; however, if our operations should change, additional alternatives would be evaluated to meet the prescribed removal timeline.

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Note 21. Supplemental Cash Flow Information


		Nine Months Ended				Three Months Ended
(amounts in thousands)	(amounts in thousands)	September 24, 2022		September 25, 2021			(amounts in thousands)	April 1, 2023		March 26, 2022
Cash Operating Activities:	Cash Operating Activities:						Cash Operating Activities:
Operating leases	Operating leases	$	44,746	$	44,018		Operating leases	$	16,490	$	15,203
Interest payments on financing lease obligations	Interest payments on financing lease obligations	120		161			Interest payments on financing lease obligations	42		43
Cash paid for amounts included in the measurement of lease liabilities	Cash paid for amounts included in the measurement of lease liabilities	$	44,866	$	44,179		Cash paid for amounts included in the measurement of lease liabilities	$	16,532	$	15,246

Cash Investing Activities:	Cash Investing Activities:						Cash Investing Activities:
Purchases of securities for deferred compensation plan	Purchases of securities for deferred compensation plan	(569)		—			Purchases of securities for deferred compensation plan	$	(420)	$	—
Sale of securities for deferred compensation plan	Sale of securities for deferred compensation plan	83		—			Sale of securities for deferred compensation plan	37		—
Change in securities for deferred compensation plan	Change in securities for deferred compensation plan	$	(486)	$	—		Change in securities for deferred compensation plan	$	(383)	$	—

Non-cash Investing Activities:	Non-cash Investing Activities:						Non-cash Investing Activities:
Property, equipment, and intangibles purchased in accounts payable	Property, equipment, and intangibles purchased in accounts payable	$	3,806	$	3,872		Property, equipment, and intangibles purchased in accounts payable	$	4,077	$	3,868
Property, equipment, and intangibles purchased with debt	Property, equipment, and intangibles purchased with debt	7,652		3,836			Property, equipment, and intangibles purchased with debt	869		1,423

Customer accounts receivable converted to notes receivable							Customer accounts receivable converted to notes receivable	38		—

Cash Financing Activities:	Cash Financing Activities:						Cash Financing Activities:

Proceeds from issuance of new debt		$	—	$	548,625

Borrowings on long-term debt	Borrowings on long-term debt	$	571,977	258			Borrowings on long-term debt	96,867		233,500
Payments of long-term debt	Payments of long-term debt	(487,202)		(615,735)			Payments of long-term debt	(96,526)		(122,877)
Payments of debt issuance and extinguishment costs, including underwriting fees		—		(5,391)

Change in long-term debt	Change in long-term debt	$	84,775	$	(72,243)		Change in long-term debt	$	341	$	110,623

Cash paid for amounts included in the measurement of finance lease liabilities	Cash paid for amounts included in the measurement of finance lease liabilities	$	1,333	$	1,630		Cash paid for amounts included in the measurement of finance lease liabilities	$	484	$	495

Non-cash Financing Activities:	Non-cash Financing Activities:						Non-cash Financing Activities:
Debt issuance costs deducted from long-term debt borrowings in accounts payable		$	—	$	58

Prepaid insurance funded through short-term debt borrowings		$	16,486	$	13,048

Shares surrendered for tax obligations for employee share-based transactions in accrued liabilities	Shares surrendered for tax obligations for employee share-based transactions in accrued liabilities	$	108	$	—		Shares surrendered for tax obligations for employee share-based transactions in accrued liabilities	$	16	$	2,268

Shares repurchased in accounts payable							Shares repurchased in accounts payable	—		2,191
Accounts payable converted to installment notes	Accounts payable converted to installment notes	1,279		69			Accounts payable converted to installment notes	176		1,279

Other Supplemental Cash Flow Information:	Other Supplemental Cash Flow Information:						Other Supplemental Cash Flow Information:
Cash taxes paid, net of refunds	Cash taxes paid, net of refunds	$	35,240	$	30,813		Cash taxes paid, net of refunds	$	13,785	$	16,648
Cash interest paid	Cash interest paid	43,895		40,996			Cash interest paid	7,641		3,682

Note 22. Subsequent Events

On April 17, 2023, we entered into a share sale agreement with Aristotle Holding III Pty Limited, a subsidiary of Platinum Equity Advisors, LLC, to sell our Australasia segment for a purchase price of approximately AUD 688.0 million. The transaction is expected to close in the third quarter of 2023, subject to certain closing conditions and regulatory approvals, including approval by the Australian Foreign Investment Review Board.

The share sale agreement specifies foreign exchange conversion rates into USD for AUD 230.0 million of the sales price.The conversion rates range from 0.6726 USD to 0.6749 USD to 1.0 AUD, depending on the sale completion date. On April 18, 2023, we entered into forward contracts to sell a total of AUD 420.0 million and receive USD at exchange rates ranging from 0.6751 USD to 0.6759 USD to 1.0 AUD. These forward contracts mature in the same quarter in which we expect to close the sale of our Australasia segment.

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Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~FORWARD-LOOKING STATEMENTS~~

~~In addition to historical information, this 10-Q~~This MD&A contains ~~“forward-looking statements” within~~forward-looking statements that involve risks and uncertainties. Please see the ~~meaning of Section 27A~~“Forward-Looking Statements” section above for a discussion of the Securities Act and Section 21E of the Exchange Act, which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts, included in this 10-Q are forward-looking statements. You can generally identify forward-looking statements by our use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek,” or “should,” or the negative thereof or other variations thereon or comparable terminology. In particular, statements about the markets in which we operate, including growth of our various markets, and our expectations, beliefs, plans, strategies, objectives, prospects, assumptions, including the impact of COVID-19, the outcome of legal proceeding, or future events or performance contained under the heading Item 2- ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ ~~are forward-looking statements.~~

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknownuncertainties, risks and ~~uncertainties, many of which are beyond our control. These and other important factors, including those discussed under the headings Item 1A-~~ ~~Risk Factors~~ ~~in our annual report on Form 10-K and Item 1A –~~ ~~Risk Factors~~ ~~and Item 2-~~ ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ ~~in this 10-Q may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by~~assumptions associated with these ~~forward-looking~~ statements. ~~Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include:~~

•~~negative trends in overall business, financial market and economic conditions, and/or activity levels in our end markets;~~

•~~our highly competitive business environment;~~

•~~failure to timely identify or effectively respond to consumer needs, expectations, or trends;~~

•~~failure to maintain the performance, reliability, quality, and service standards required by our customers;~~

•~~failure to successfully implement our strategic initiatives, including JEM;~~

•~~acquisitions or investments in other businesses that may not be successful;~~

•~~adverse outcome of pending or future litigation;~~

•~~declines in our relationships with and/or consolidation of our key customers;~~

•~~increases in interest rates and reduced availability of financing for the purchase of new homes and home construction and improvements;~~

•~~fluctuations in the prices of raw materials used to manufacture our products;~~

•~~delays or interruptions in the delivery of raw materials or finished goods;~~

•~~seasonal business with varying revenue and profit;~~

•~~changes in weather patterns;~~

•political, regulatory, economic, and other risks, including the impact of political conflict on the global economy and the ongoing impact of the COVID-19 pandemic, that arise from operating a multinational business;

•~~exchange rate fluctuations;~~

•~~disruptions in our operations;~~

•~~manufacturing realignments and cost savings programs resulting in a decrease in short-term earnings;~~

•~~our ERP system that we are currently implementing proving ineffective;~~

•~~security breaches and other cybersecurity incidents;~~

•~~increases in labor costs, potential labor disputes, and work stoppages at our facilities;~~

•~~changes in building codes that could increase the cost of our products or lower the demand for our windows and doors;~~

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•~~compliance costs and liabilities under environmental, health, and safety laws and regulations;~~

•~~compliance costs with respect to legislative and regulatory proposals to restrict emission of GHGs;~~

•~~lack of transparency, threat of fraud, public sector corruption, and other forms of criminal activity involving government officials;~~

•~~product liability claims, product recalls, or warranty claims;~~

•~~inability to protect our intellectual property;~~

•~~pension plan obligations;~~

•~~our current level of indebtedness; and~~

•~~other risks and uncertainties, including those listed under Item 1A-~~ ~~Risk Factors~~ ~~in our 10-K and Item 1A-~~ ~~Risk Factors~~ ~~in this 10-Q.~~

Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this 10-Q are not guarantees of future performance and our actual results of operations, financial condition, and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements contained herein. In addition, even if our results of operations, financial condition, and liquidity, and events in the industry in which we operate, are consistent with the forward-looking statements contained in this 10-Q, they may not be predictive of results or developments in future periods.

Any forward-looking statement in this 10-Q speaks only as of the date of this 10-Q or as of the date such statement was made. We do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Unless the context requires otherwise, references in this 10-Q to “we,” “us,” “our,” “the Company,” or “JELD-WEN” mean JELD-WEN Holding, Inc., together with our consolidated subsidiaries where the context requires, including our wholly owned subsidiary JWI.

This discussion should be read in conjunction with our ~~historical~~unaudited financial statements and related notes thereto and the other disclosures contained elsewhere in this ~~10-Q.~~Form 10-Q, and our audited financial statements and related notes and MD&A included in our Form 10-K. The results of operations for the periods reflected herein are not necessarily indicative of results that may be expected for future periods, and our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those listed under Item ~~1A-~~1A – Risk Factors in our ~~annual report on~~ Form 10-K and ~~Item 1A –~~ ~~Risk Factors~~ ~~in this~~Form 10-Q, and included elsewhere in this Form 10-Q.

This MD&A is a supplement to our unaudited financial statements and notes thereto included elsewhere in this Form 10-Q and is provided to enhance your understanding of our results of operations and financial condition. Our discussion of results of operations is presented in millions throughout the MD&A and due to rounding may not sum or calculate precisely to the totals and percentages provided in the tables. Our MD&A is organized as follows:

•Overview. This section provides a general description of our Company and reportable segments.

•Consolidated Results of Operations and Operating Results by Business Segment. This section provides our analysis and outlook for the significant line items on our consolidated statements of operations, as well as other information that we deem meaningful to an understanding of our results of operations on both a consolidated basis and a business segment basis.

•Liquidity and Capital Resources. This section contains an overview of our financing arrangements and provides an analysis of trends and uncertainties affecting liquidity, cash requirements for our business, and sources and uses of our cash.

•Critical Accounting Policies and Estimates. This section discusses the accounting policies that we consider important to the evaluation and reporting of our financial condition and results of operations, and whose application requires significant judgments or a complex estimation process.

Company Overview

We are a leading global provider of windows, doors, wall systems, and other building products. We design, produce, and distribute an extensive range of interior and exterior doors, wood, vinyl, and aluminum windows, and related products for use in the new construction, R&R of residential homes, and, to a lesser extent, non-residential buildings.

We operate manufacturing and distribution facilities in 19 countries, located primarily in North America, Europe, and Australia. For many product lines, our manufacturing processes are vertically integrated, enhancing our range of capabilities, our ability to innovate, and our quality control as well as providing supply chain, transportation, and working capital savings.

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Business Segments

Our business is organized in geographic regions to ensure integration across operations serving common end markets and customers. We have three reportable segments: North America, Europe, and Australasia. Financial information related to our business segments can be found in Note 11 - Segment Information of our financial statements included elsewhere in this Form 10-Q.

Results of Operations

The tables in this section summarize key components of our results of operations for the periods indicated, both in U.S. dollars and as a percentage of our net revenues. Certain percentages presented in this section have been rounded to the nearest whole number. Accordingly, totals may not equal the sum of the line items in the tables below.

Comparison of the Three Months Ended ~~September 24, 2022~~April 1, 2023 to the Three Months Ended ~~September 25, 2021~~March 26, 2022

Three Months Ended
September 24, 2022 September 25, 2021
(amounts in thousands) % of Net
Revenues % of Net
Revenues
Net revenues $ 1,295,810 100.0 % $ 1,146,585 100.0 %
Cost of sales 1,045,031 80.6 % 918,513 80.1 %
Gross margin 250,779 19.4 % 228,072 19.9 %
Selling, general and administrative 192,394 14.8 % 173,774 15.2 %
Goodwill impairment 54,885 4.2 % — — %
Impairment and restructuring charges 6,579 0.5 % 576 0.1 %
Operating (loss) income (3,079) (0.2) % 53,722 4.7 %
Interest expense, net 21,138 1.6 % 19,377 1.7 %
Other income (7,690) (0.6) % (3,251) (0.3) %
(Loss) income before taxes (16,527) (1.3) % 37,596 3.3 %
Income tax expense (benefit) 16,665 1.3 % (2,946) (0.3) %
Net (loss) income $ (33,192) (2.6) % $ 40,542 3.5 %


	Three Months Ended
	April 1, 2023				March 26, 2022
(amounts in thousands)			% of Net Revenues				% of Net Revenues
Net revenues	$	1,222,617	100.0	%	$	1,171,022		100.0	%
Cost of sales	990,549		81.0	%	967,724			82.6	%
Gross margin	232,068		19.0	%	203,298			17.4	%
Selling, general and administrative	185,507		15.2	%	192,996			16.5	%

Restructuring and asset related charges	9,266		0.8	%	1			—	%
Operating income	37,295		3.1	%	10,301			0.9	%
Interest expense, net	21,221		1.7	%	18,354			1.6	%

Other income, net	(5,272)		(0.4)	%	(7,337)			(0.6)	%
Income before taxes	21,346		1.7	%	(716)			(0.1)	%
Income tax expense	6,212		0.5	%	(188)			—	%



Net income	$	15,134	1.2	%	$	(528)		—	%

Consolidated Results

Net Revenues – Net revenues increased ~~$149.2~~$51.6 million, or ~~13.0%~~4.4%, to ~~$1,295.8~~$1,222.6 million in the three months ended ~~September 24, 2022~~April 1, 2023 from ~~$1,146.6~~$1,171.0 million in the three months ended ~~September 25, 2021.~~March 26, 2022. The increase was ~~due to an improvement in core revenues~~driven by Core Revenue growth of ~~18%~~7%, partially offset by ~~an unfavorable impact from~~a 3% adverse foreign exchange ~~of 5%.~~impact. Core ~~revenues~~Revenues increased due to a ~~15%~~10% benefit from price realization mostly related to prior year pricing ~~and favorable~~actions in response to significant inflation from input costs, partially offset by reductions in volume/mix of 3%.

Gross Margin – Gross margin increased ~~$22.7~~$28.8 million, or ~~10.0%~~14.2%, to ~~$250.8~~$232.1 million in the three months ended ~~September 24, 2022~~April 1, 2023 from ~~$228.1~~$203.3 million in the three months ended ~~September 25, 2021.~~March 26, 2022. Gross margin as a percentage of net revenues was ~~19.4%~~19.0% in the three months ended ~~September 24, 2022~~April 1, 2023 and ~~19.9%~~17.4% in the three months ended ~~September 25, 2021.~~March 26, 2022. The ~~decrease~~increase in gross margin percentage was due primarily to the ~~impact of inflation on material~~timing differences between increased input costs ~~as well as expenses for freight, labor compensation,~~ and ~~utilities, partially offset by improved~~our pricing ~~favorable volume/mix and improved productivity.~~actions in our end markets.

SG&A Expense – SG&A expense ~~increased $18.6~~decreased $7.5 million, or ~~10.7%~~3.9%, to ~~$192.4~~$185.5 million in the three months ended ~~September 24, 2022~~April 1, 2023 from ~~$173.8~~$193.0 million in the three months ended ~~September 25, 2021.~~March 26, 2022. SG&A expense as a percentage of net revenues decreased to ~~14.8% in the three months ended September 24, 2022 from~~ 15.2% in the three months ended September 25, 2021. The increase in SG&A expense was primarily due to increased self-insurance costs and variable compensation expenses, partially offset by decreased sales and marketing and research and development expenditures.

~~Goodwill Impairment~~ ~~– Goodwill impairment charges of $54.9 million~~April 1, 2023 from 16.5% in the three months ended ~~September 24, 2022 relate~~March 26, 2022. The decrease in SG&A expense and SG&A as a percentage of net revenues was primarily due to ~~goodwill impairment charges associated with our Europe reporting unit. For more information, refer to Note 5 –~~ ~~Goodwill~~ decreased labor and variable compensation expenses driven by a reduction in ~~our consolidated financial statements included in this 10-Q.~~headcount.

~~Impairment~~Restructuring and ~~Restructuring~~Asset Related Charges – ~~Impairment~~Restructuring and ~~restructuring~~asset related charges ~~increased $6.0 million, or 1,042.2%, to $6.6 million~~ in the three months ended ~~September 24, 2022 from $0.6 million in the three months ended September 25, 2021. The increase in impairment and restructuring charges of $6.0 million in the current period was primarily due~~April 1, 2023 relate to ~~strategic~~ transformation initiatives,

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cost savings, and footprint rationalization activities in our North America and Europe ~~segments as well as repositioning the management structure~~segments. The restructuring charges in our North America segment primarily relate to ~~align~~charges incurred in connection with a restructuring plan to close a manufacturing facility in Atlanta, Georgia. For more information, refer to Note 15 - Restructuring and Asset Related Charges to our ~~operations.~~unaudited consolidated financial statements included in this Form 10-Q.

Interest Expense, Net – Interest expense, net, increased ~~$1.8~~$2.9 million, or ~~9.1%~~15.6%, to ~~$21.1~~$21.2 million in the three months ended ~~September 24, 2022~~April 1, 2023 from ~~$19.4~~$18.4 million in the three months ended ~~September 25, 2021.~~March 26, 2022. The increase was primarily due to an increase to the cost of borrowing on our variable rate Term Loan Facility, ~~and increased borrowings on the ABL Facility in the current period,~~ partially offset by interest income from interest rate derivatives in the current period.

Other Income, Net – Other income, ~~increased $4.4~~net decreased $2.1 million, or 28.1%, to ~~$7.7~~$5.3 million in the three months ended ~~September 24, 2022~~April 1, 2023 from ~~$3.3~~$7.3 million in the three months ended ~~September 25, 2021.~~March 26, 2022. Other income, net in the three months ended ~~September 24, 2022~~April 1, 2023 primarily consisted ~~primarily~~ of foreign currency gains of ~~$3.3~~$3.5 million, ~~insurance reimbursements of $1.5 million, pension income of $1.3 million, and~~ the recovery of cost from interest received on impaired notes of ~~$0.5~~$1.4 million, and reimbursements from insurance of $1.2 million, partially offset by pension expense of $1.8 million. Other income, net in the three months ended September 25, 2021 consisted primarily of foreign currency gains of $3.2 million and governmental pandemic assistance reimbursements and government grants of $0.8 million, partially offset by a loss on extinguishment of debt of $1.3 million and a loss on sale or disposal of property and equipment of $0.6 million.

~~Income Taxes~~ – Income tax expense (benefit) increased $19.6 million to a tax expense of $16.7 million in the three months ended September 24, 2022 compared to a tax benefit of $2.9 million in the three months ended September 25, 2021. The effective tax rate in the three months ended September 24, 2022 was (100.8)% compared to (7.8)% in the three months ended September 25, 2021. The increase in the effective tax rate in the three months ended September 24, 2022 was primarily due to the $54.9 million goodwill impairment. The increase in tax expense of $19.6 million in the current period was primarily due discrete tax expenses of $1.9 million in the current period compared to discrete tax benefits of $9.3 million in the prior period and the mix of income between jurisdictions in which the Company does business. For more information, refer to Note 10 – ~~Income Taxes~~ ~~in our consolidated financial statements included in this 10-Q.~~

~~Comparison of the Nine Months Ended September 24, 2022 to the Nine Months Ended September 25, 2021~~

Nine Months Ended
September 24, 2022 September 25, 2021
(amounts in thousands) % of Net
Revenues % of Net
Revenues
Net revenues $ 3,797,800 100.0 % $ 3,484,783 100.0 %
Cost of sales 3,097,558 81.6 % 2,728,855 78.3 %
Gross margin 700,242 18.4 % 755,928 21.7 %
Selling, general and administrative 565,877 14.9 % 554,019 15.9 %
Goodwill impairment 54,885 1.4 % — — %
Impairment and restructuring charges 11,876 0.3 % 2,648 0.1 %
Operating income 67,604 1.8 % 199,261 5.7 %
Interest expense, net 59,714 1.6 % 56,692 1.6 %
Other income (35,914) (0.9) % (13,940) (0.4) %
Income before taxes 43,804 1.2 % 156,509 4.5 %
Income tax expense 31,698 0.8 % 29,772 0.9 %
Net income $ 12,106 0.3 % $ 126,737 3.6 %

~~Consolidated Results~~

~~Net Revenues~~ – Net revenues increased $313.0 million, or 9.0%, to $3,797.8 million in the nine months ended September 24, 2022 from $3,484.8 million in the nine months ended September 25, 2021. The increase was due to an improvement in core revenues of 13%, partially offset by an unfavorable impact from foreign exchange of 4%. Core revenues increased due to a 13% benefit from pricing.

~~Gross Margin~~ – Gross margin decreased $55.7 million, or 7.4%, to $700.2 million in the nine months ended September 24, 2022 from $755.9 million in the nine months ended September 25, 2021. Gross margin as a percentage of net revenues was 18.4% in the nine months ended September 24, 2022 and 21.7% in the nine months ended September 25, 2021. The decrease in gross margin percentage was primarily due to the impact of inflation on material costs as well as expenses for freight, labor compensation, and utilities, partially offset by improved pricing and improved productivity.

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~~SG&A Expense~~ – SG&A expense increased $11.9 million, or 2.1%, to $565.9 million in the nine months ended September 24, 2022 from $554.0 million in the nine months ended September 25, 2021. SG&A expense as a percentage of net revenues decreased to 14.9% in the nine months ended September 24, 2022 from 15.9% in the nine months ended September 25, 2021. The increase in SG&A expense was primarily due to increased self-insurance costs and sales and marketing and research and development expenditures, partially offset by decreased legal and professional fees.

~~Goodwill Impairment~~ – Goodwill impairment charges of $54.9 million in the nine months ended September 24, 2022 relate to goodwill impairment charges associated with our Europe reporting unit. For more information, refer to Note 5 – ~~Goodwill~~ ~~in our consolidated financial statements included in this 10-Q.~~

~~Impairment and Restructuring Charges~~ – Impairment and restructuring charges increased $9.2 million, or 348.5%, to $11.9 million in the nine months ended September 24, 2022 from $2.6 million in the nine months ended September 25, 2021. The increase in restructuring charges is primarily due to strategic transformation initiatives and footprint rationalization activities in our North America and Europe segments in the current year compared to the prior year.

~~Interest Expense, Net~~ – Interest expense, net, increased $3.0 million, or 5.3%, to $59.7 million in the nine months ended September 24, 2022 from $56.7 million in the nine months ended September 25, 2021. The increase was primarily due to an increase to the cost of borrowing on our Term Loan Facility and increased borrowings on the ABL Facility in the current period, partially offset by interest income from interest rate derivatives in the current period and the repayment of the term loan portion of the Australia Facility during the second quarter of 2021.

~~Other Income~~ – Other income increased $22.0 million, or 157.6%, to $35.9 million in the nine months ended September 24, 2022 from $13.9 million in the nine months ended September 25, 2021. Other income in the nine months ended September 24,March 26, 2022 primarily consisted of the recovery of cost from interest received on impaired notes of $14.0 million, foreign currency gains of $8.7 million, insurance reimbursements of $6.3 million, and pension income of $4.2 million. Other income in the nine months ended September 25, 2021 primarily consisted of foreign currency gains of $12.1 million and governmental pandemic assistance reimbursements and government grants of $1.3 million, partially offset by a loss on extinguishment of debt of $1.3 million and a loss on sale or disposal of property and equipment of $0.9 million.

~~Income Taxes~~ – Income tax expense increased $1.9 million, or 6.5%, to $31.7 million in the nine months ended September 24, 2022 from $29.8 million in the nine months ended September 25, 2021. The effective tax rate in the nine months ended September 24, 2022 was 72.4% compared to 19.0% in the nine months ended September 25, 2021. The increase in the effective tax rate in the nine months ended September 24, 2022 was primarily due to the $54.9 million goodwill impairment. The increase in tax expense of $1.9 million in the current period was primarily due to a decrease in discrete tax benefits of $4.5 million in the current period compared $10.9 million in the prior period and the mix of income between jurisdictions in which the Company does business, partially offset by a decrease in income before taxes of $112.7 million. For more information, refer to Note 10 – ~~Income Taxes~~ ~~in our consolidated financial statements included in this 10-Q.~~$7.0

3834

million and pension income of $1.4 million, partially offset by foreign currency losses of $1.7 million. Refer to Note 17 - Other Income, Net for the remaining components of other income, net.

Income Taxes – Income tax expense increased $6.4 million, to a tax expense of $6.2 million in the three months ended April 1, 2023 from a $0.2 million income tax benefit in the three months ended March 26, 2022. The effective tax rate in the three months ended April 1, 2023 was 29.1% compared to 26.3% in the three months ended March 26, 2022. The increase in income taxes was primarily due an increase in income before taxes. For more information, refer to Note 10- Income Taxes to our unaudited consolidated financial statements included in this Form 10-Q.

Segment Results

We report our segment information in the same way management internally organizes the business in assessing performance and making decisions regarding allocation of resources in accordance with ASC 280-10 - Segment Reporting. We have ~~determined that we have~~ three reportable segments, organized and managed principally by geographic region. Our reportable segments are North America, Europe, and Australasia. We report all other business activities in Corporate and unallocated costs.We define Adjusted EBITDA as net income (loss), adjusted for the following items: (income) loss from discontinued operations, net of tax; ~~equity earnings of non-consolidated entities;~~ income tax expense (benefit) ~~expense;~~; depreciation and amortization; interest expense, ~~net; impairment~~net; and certain special items consisting of non-recurring legal and professional expenses and settlements; restructuring and asset related charges; ~~gain on previously held shares of equity investment; (gain) loss on sale of property~~facility closure, consolidation, and ~~equipment;~~other related costs and adjustments; M&A related costs; share-based compensation expense; non-cash foreign exchange transaction/translation (income) loss; and other ~~non-cash items; other items; and costs related~~special items.

Reconciliations of net income to ~~debt restructuring and debt refinancing. For additional information on segment~~ Adjusted EBITDA ~~see Note 11 -~~ ~~Segment Information~~ tofor our ~~consolidated financial statements included in this 10-Q.~~segments’ operations are as follows:

~~Comparison of the Three Months Ended September 24, 2022 to the Three Months Ended September 25, 2021~~

Three Months Ended
(amounts in thousands) September 24, 2022 September 25, 2021
Net revenues from external customers % Variance
North America $ 835,134 $ 676,793 23.4 %
Europe 304,891 322,554 (5.5) %
Australasia 155,785 147,238 5.8 %
Total Consolidated $ 1,295,810 $ 1,146,585 13.0 %
Percentage of total consolidated net revenues
North America 64.4 % 59.1 %
Europe 23.6 % 28.1 %
Australasia 12.0 % 12.8 %
Total Consolidated 100.0 % 100.0 %
Adjusted EBITDA(1)
North America $ 105,291 $ 76,889 36.9 %
Europe 18,086 23,780 (23.9) %
Australasia 19,940 17,565 13.5 %
Corporate and unallocated costs (26,788) (19,362) 38.4 %
Total Consolidated $ 116,529 $ 98,872 17.9 %
Adjusted EBITDA as a percentage of segment net revenues
North America 12.6 % 11.4 %
Europe 5.9 % 7.4 %
Australasia 12.8 % 11.9 %
Total Consolidated 9.0 % 8.6 %


	Three Months Ended April 1, 2023
(amounts in thousands)		North America		Europe		Australasia		Total Operating Segments		Corporate and Unallocated Costs		Total Consolidated
Net income (loss)		$	35,249	$	7,299	$	5,317	$	47,865	$	(32,731)	$	15,134
Income tax expense (benefit)		14,533		1,415		2,348		18,296		(12,084)		6,212
Depreciation and amortization		17,798		7,433		4,447		29,678		3,112		32,790
Interest expense, net		2,834		128		869		3,831		17,390		21,221
Special items:(1)
Legal and professional expenses and settlements		—		70		—		70		1,752		1,822

Restructuring and asset related charges		7,812		1,267		—		9,079		187		9,266

Facility closure, consolidation, and other related costs and adjustments		9		1,338		—		1,347		—		1,347
M&A related costs		246		—		—		246		4,304		4,550

Share-based compensation expense		960		499		259		1,718		2,665		4,383
Non-cash foreign exchange transaction/translation (income)		(185)		(1,708)		(936)		(2,829)		(237)		(3,066)
Other special items		(58)		(104)		291		129		(253)		(124)
Adjusted EBITDA		$	79,198	$	17,637	$	12,595	$	109,430	$	(15,895)	$	93,535

(1)~~Adjusted EBITDA is a financial measure that is not calculated in accordance with GAAP.~~ For ~~a discussion~~the definitions of ~~our presentation of Adjusted EBITDA, see~~the Special items listed above, refer to Note 11 –- Segment Information in our unaudited ~~interim~~ consolidated financial statements. included in this Form 10-Q.

~~North America~~

Net revenues in North America increased $158.3 million, or 23.4%, to $835.1 million in the three months ended September 24, 2022 from $676.8 million in the three months ended September 25, 2021. The increase was primarily due to an increase in core revenues of 23%. Core revenues increased due to a 17% benefit from pricing and favorable volume/mix of 6%.

Adjusted EBITDA in North America increased $28.4 million, or 36.9%, to $105.3 million in the three months ended September 24, 2022 from $76.9 million in the three months ended September 25, 2021. The increase was primarily due to favorable pricing and improved volume/mix, partially offset by the effect of inflation on material costs as well as expenses for freight and labor compensation.

3935

~~Europe~~


	Three Months Ended March 26, 2022
(amounts in thousands)		North America		Europe		Australasia		Total Operating Segments		Corporate and Unallocated Costs		Total Consolidated
Net income (loss)		$	38,068	$	(631)	$	2,017	$	39,454	$	(39,982)	$	(528)
Income tax expense (benefit)(1)		1,008		1,398		996		3,402		(3,590)		(188)
Depreciation and amortization		16,685		7,892		4,844		29,421		3,144		32,565
Interest expense, net		1,127		1,805		1,014		3,946		14,408		18,354
Special items:(2)
Legal and professional expenses and settlements		4		—		138		142		1,774		1,916

Restructuring and asset related charges		—		—		22		22		(21)		1

Facility closure, consolidation, and other related costs and adjustments		—		132		—		132		—		132
M&A related costs		144		—		—		144		3,126		3,270

Share-based compensation expense		2,021		874		477		3,372		6,292		9,664
Non-cash foreign exchange transaction/translation loss (income)		345		(3,648)		613		(2,690)		8,908		6,218
Other special items		7,683		6,876		251		14,810		(5,965)		8,845
Adjusted EBITDA		$	67,085	$	14,698	$	10,372	$	92,155	$	(11,906)	$	80,249

~~Net revenues~~(1)Income tax expense (benefit) in Europe decreased $17.7 million, or 5.5%, to $304.9 million in the three months ended September 24, 2022 from $322.6 million in the three months ended September 25, 2021. The decrease was due to an unfavorable impact from foreign exchange of 15%, partially offset by an increase in core revenues of 10%. Core revenues increased due to a 13% benefit from pricing, partially offset by unfavorable volume/mix of 3%.

Adjusted EBITDA in Europe decreased $5.7 million, or 23.9%, to $18.1 million in the three months ended September 24, 2022 from $23.8 million in the three months ended September 25, 2021. The decrease was primarily due to the effect of inflation on material costs as well as expenses for freight, utilities, and labor compensation and unfavorable volume/mix, partially offset by favorable pricing and improved productivity.

~~Australasia~~

Net revenues in Australasia increased $8.5 million, or 5.8%, to $155.8 million in the three months ended September 24, 2022 from $147.2 million in the three months ended September 25, 2021. The increase was primarily due to an increase in core revenues of 14%, partially offset by an unfavorable impact from foreign exchange of 8%. Core revenues increased due to a 10% benefit from pricing and favorable volume/mix of 4%.

Adjusted EBITDA in Australasia increased $2.4 million, or 13.5%, to $19.9 million in the three months ended September 24, 2022 from $17.6 million in the three months ended September 25, 2021. The increase was primarily due to favorable pricing and improved volume/mix, partially offset by the effect of inflation on material costs and labor compensation.

~~Corporate and unallocated costs~~

Corporate and unallocated costs ~~increased~~includes the tax impact of U.S. Operations.

(2)For the definitions of the Special items listed above, refer to Note 11 - Segment Information in ~~the three months ended September 24, 2022 compared~~our unaudited consolidated financial statements included in this Form 10-Q.

Back to the three months ended September 25, 2021 primarily due to the increased self insurance costs and variable compensation, partially offset by a gain on foreign exchange transactions, insurance recoveries, and recovery of cost from interest received on impaired notes in the current period resulting in a decrease to Adjusted EBITDA of $7.4 million, or 38.4%.top

Comparison of the ~~Nine~~Three Months Ended ~~September 24, 2022~~April 1, 2023 to the ~~Nine~~Three Months Ended ~~September 25, 2021~~March 26, 2022


		Nine Months Ended									Three Months Ended
(amounts in thousands)	(amounts in thousands)	September 24, 2022			September 25, 2021					(amounts in thousands)	April 1, 2023			March 26, 2022
Net revenues from external customers	Net revenues from external customers							% Variance		Net revenues from external customers							% Variance
North America	North America	$	2,396,584		$	2,056,536		16.5	%	North America	$	768,033		$	722,343		6.3	%
Europe	Europe	968,210			992,816			(2.5)	%	Europe	312,489			323,272			(3.3)	%
Australasia	Australasia	433,006			435,431			(0.6)	%	Australasia	142,095			125,407			13.3	%
Total Consolidated	Total Consolidated	$	3,797,800		$	3,484,783		9.0	%	Total Consolidated	$	1,222,617		$	1,171,022		4.4	%
Percentage of total consolidated net revenues	Percentage of total consolidated net revenues									Percentage of total consolidated net revenues
North America	North America	63.1		%	59.0		%			North America	62.8		%	61.7		%
Europe	Europe	25.5		%	28.5		%			Europe	25.6		%	27.6		%
Australasia	Australasia	11.4		%	12.5		%			Australasia	11.6		%	10.7		%
Total Consolidated	Total Consolidated	100.0		%	100.0		%			Total Consolidated	100.0		%	100.0		%
Adjusted EBITDA(1)	Adjusted EBITDA(1)									Adjusted EBITDA(1)
North America	North America	$	265,848		$	272,002		(2.3)	%	North America	$	79,198		$	67,085		18.1	%
Europe	Europe	52,824			92,358			(42.8)	%	Europe	17,637			14,698			20.0	%
Australasia	Australasia	46,184			48,759			(5.3)	%	Australasia	12,595			10,372			21.4	%
Corporate and unallocated costs	Corporate and unallocated costs	(42,283)			(68,094)			(37.9)	%	Corporate and unallocated costs	(15,895)			(11,906)			33.5	%
Total Consolidated	Total Consolidated	$	322,573		$	345,025		(6.5)	%	Total Consolidated	$	93,535		$	80,249		16.6	%
Adjusted EBITDA as a percentage of segment net revenues	Adjusted EBITDA as a percentage of segment net revenues									Adjusted EBITDA as a percentage of segment net revenues
North America	North America	11.1		%	13.2		%			North America	10.3		%	9.3		%
Europe	Europe	5.5		%	9.3		%			Europe	5.6		%	4.5		%
Australasia	Australasia	10.7		%	11.2		%			Australasia	8.9		%	8.3		%
Total Consolidated	Total Consolidated	8.5		%	9.9		%			Total Consolidated	7.7		%	6.9		%

(1)Adjusted EBITDA is a financial measure that is not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted EBITDA, see Note 11 - Segment Information in our unaudited consolidated financial statements.

North America

Net revenues in North America increased $45.7 million, or 6.3%, to $768.0 million in the three months ended April 1, 2023 from $722.3 million in the three months ended March 26, 2022. The increase was due to an increase in Core Revenues of 7%. Core Revenues increased primarily due to a 10% benefit from price realization mostly related to prior year pricing actions in response to significant inflation from input costs, partially offset by unfavorable volume/mix of 3% driven by weakened market demand, partially offset by share gains.

Adjusted EBITDA in North America increased $12.1 million to $79.2 million, or 18.1 %, in the three months ended April 1, 2023 from $67.1 million in the three months ended March 26, 2022. The increase was primarily due to favorable price/cost, partially offset by unfavorable volume/mix and higher operating costs and other expenses. The increase in operating costs and other expenses was driven by increased pension expense and an additional week of labor compensation during the three months ended April 1, 2023 compared to the same period last year. The increase was partially offset by a reduction in our allowance for credit losses due to improved collections.

Europe

Net revenues in Europe decreased $10.8 million, or 3.3%, to $312.5 million in the three months ended April 1, 2023 from $323.3 million in the three months ended March 26, 2022. The decrease was primarily due to an adverse impact from foreign exchange of 6%, partially offset by an increase in core revenues of 3%. Core Revenues increased due to an 10% benefit from price realization mostly related to prior year pricing actions in response to significant inflation from input costs, partially offset by unfavorable volume/mix of 7% primarily due to market softness and uncertainty across the region.

Adjusted EBITDA in Europe increased $2.9 million, or 20.0%, to $17.6 million in the three months ended April 1, 2023 from $14.7 million in the three months ended March 26, 2022. The increase was primarily due to positive price/cost and favorable productivity, partially offset by unfavorable volume/mix.

~~North America~~Australasia

Net revenues in ~~North America~~Australasia increased ~~$340.0~~$16.7 million, or ~~16.5%~~13.3%, to ~~$2,396.6~~$142.1 million in the ~~nine~~three months ended ~~September 24, 2022~~April 1, 2023 from ~~$2,056.5~~$125.4 million in the ~~nine~~three months ended ~~September 25, 2021.~~March 26, 2022. The increase was primarily due to an increase in ~~core revenues~~Core Revenues of ~~17%. Core revenues increased due to a 15% benefit from pricing and favorable volume/mix of 2%.~~

~~Adjusted EBITDA in North America decreased $6.2 million, or 2.3%~~20%, to $265.8 million in the nine months ended September 24, 2022 from $272.0 million in the nine months ended September 25, 2021. The decrease was due to the impact of inflation on material costs as well as expenses for freight and labor compensation, partially offset by ~~favorable pricing, improved volume/mix, and improved productivity.~~

~~Europe~~

Net revenues in Europe decreased $24.6 million, or 2.5%, to $968.2 million in the nine months ended September 24, 2022 from $992.8 million in the nine months ended September 25, 2021. The decrease was primarily due to an unfavorablea negative impact from foreign exchange of ~~11%, partially offset by an increase in core revenue of 9%~~7%. Core ~~revenues~~Revenues increased due to an ~~11%~~9% benefit from price realization mostly related to prior year pricing ~~partially offset by unfavorable~~actions in response to significant inflation from input costs, and positive volume/mix of ~~2%.~~

Adjusted EBITDA in Europe decreased $39.5 million, or 42.8%, to $52.8 million in the nine months ended September 24, 2022 from $92.4 million in the nine months ended September 25, 2021. The decrease was primarily11% due to the impact of inflation on material costs as well as expenses for freight, utilities, and labor compensation and unfavorable volume/mix, partially offset by favorable pricing and improved productivity.

~~Australasia~~

Net revenues in Australasia decreased $2.4 million, or 0.6%, to $433.0 million in the nine months ended September 24, 2022 from $435.4 million in the nine months ended September 25, 2021. The decrease was primarily due to an unfavorable impact from foreign exchange of 7%, partially offset by an increase in core revenues of 6%. Core revenues increased due to an 8% benefit from pricing, partially offset by unfavorable volume/mix of 2%.strong demand.

Adjusted EBITDA in Australasia ~~decreased $2.6~~increased $2.2 million, or ~~5.3%~~21.4%, to ~~$46.2~~$12.6 million in the ~~nine~~three months ended ~~September 24, 2022~~April 1, 2023 from ~~$48.8~~$10.4 million in the ~~nine~~three months ended ~~September 25, 2021.~~March 26, 2022. The ~~decrease~~increase was primarily due to ~~the impact of inflation on material costs~~favorable price/cost and ~~labor compensation and unfavorable~~higher volume/mix, partially offset by ~~favorable pricing and improved productivity.~~increased operating costs primarily driven by credit losses incurred as a result of the bankruptcy of a large customer.

Corporate and unallocated costs

Corporate and unallocated costs ~~decreased~~increased in the ~~nine~~three months ended ~~September 24, 2022~~April 1, 2023 by $4.0 million, or 33.5%, compared to the ~~nine~~three months ended ~~September 25, 2021~~March 26, 2022, primarily due to a reduction in the recovery of cost from interest received on impaired notes and a ~~gain~~reduction in gains on foreign exchange transactions, reduced legal and professional fees, and insurance recoveries, partially offset by increased self-insurance and compensation costs in the current period resulting in an increase to Adjusted EBITDA of $25.8 million, or 37.9%.transactions.

Liquidity and Capital Resources

Overview

We have historically funded our operations through a combination of cash from operations, draws on our revolving credit facilities, and the issuance of non-revolving debt such as our Term Loan Facility, Senior Notes, and Senior Secured Notes. Working capital fluctuates throughout the year and is ~~affected~~impacted by inflation, the seasonality of ~~sales of~~ our ~~products,~~sales, customer payment patterns, supply availability, and the translation of the balance sheets of our foreign operations into the U.S. dollar. Typically, working capital increases at the end of the first quarter and beginning of the second quarter in conjunction with, and in preparation for, the peak season for home construction and remodeling in our North America and Europe segments, which represent the substantial majority of our revenues, and decreases starting in the fourth quarter as inventory levels and accounts receivable decline. Inventories fluctuate for raw materials with long delivery lead times, such as steel, as we work through prior shipments and take delivery of new orders.

As of ~~September 24, 2022,~~April 1, 2023, we had total liquidity (a non-GAAP measure) of ~~$562.4~~$618.9 million, consisting of ~~$199.8~~$202.6 million in unrestricted cash, ~~$347.4~~$401.2 million available for borrowing under the ABL Facility, and AUD ~~23.0~~$22.5 million ($~~15.2~~15.1 million) available for borrowing under the Australia Senior Secured Credit Facility, compared to total liquidity of ~~$837.8~~$645.5 million as of December 31, ~~2021.~~2022. The decrease in total liquidity was primarily due to both lower cash balances and lower availability on our ABL Facility at ~~September 24, 2022~~April 1, 2023 compared to December 31, 2021. The main driver to our lower cash balances are decreased earnings, higher working capital balances, and share repurchases. The reduced ABL Facility availability is driven by increased borrowings in the current period compared to the prior year end.2022.

As of ~~September 24, 2022,~~April 1, 2023, our cash balances, including ~~$1.3~~$1.4 million of restricted cash, consisted of ~~$14.9~~$14.6 million in the U.S. and ~~$186.2~~$189.4 million in non-U.S. subsidiaries. InDuring the ~~third quarter,~~fiscal year ended December 31, 2022, the Company repatriated ~~$82.2~~$132.8 million from non-U.S. subsidiaries and repaid a portion of the outstanding ABL Facility. Based on our current level of operations, the seasonality of our business and

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anticipated growth, we believe that cash provided by operations and other sources of liquidity, including cash, cash equivalents, and availability under our revolving credit facilities, will provide adequate liquidity for ongoing operations, planned capital expenditures and other investments, and debt service requirements for at least the next twelve months.

We may, from time to time, refinance, reprice, extend, retire, or otherwise modify our outstanding debt to lower our interest payments, reduce our debt, or otherwise improve our financial position. These actions may include repricing amendments, extensions, and/or opportunistic refinancing of debt. The amount of debt that may be refinanced, repriced, extended, retired, or otherwise modified, if any, will depend on market conditions, trading levels of our debt, our cash position, compliance with debt covenants, and other considerations.

Based on hypothetical variable rate debt that would have resulted from drawing each revolving credit facility up to the full commitment amount, a 1.0% decrease in interest rates would have reduced our interest expense by ~~$5.3~~$1.8 million in the ~~nine~~three months ended ~~September 24, 2022.~~April 1, 2023. A 1.0% increase in interest rates would have increased our interest expense by ~~$5.4~~$1.8 million in the same period. The impact of a hypothetical decrease would have been partially mitigated by interest rate floors that apply to certain of our debt agreements.

Borrowings and Refinancings

In December 2021, we amended our Australia Senior Secured Credit Facility resulting in reduced borrowing fees and reinstated maintenance financial covenant ratios to pre-pandemic thresholds.

In July 2021, we refinanced our existing Term Loan Facility and ABL Facility by issuing replacement loans that aggregated to $550.0 million in principal amount under the Term Loan Facility and added $100.0 million in potential additional revolving loan capacity to our ABL Facility.

As of ~~September 24, 2022,~~April 1, 2023, we were in compliance with the terms of all of our Credit Facilities and the indentures governing the Senior Notes and Senior Secured Notes.

Our results have been and will continue to be impacted by substantial changes in our net interest expense throughout the periods presented and into the future. See Note 9 - Long-Term Debt to our consolidated financial statements for additional details.

Cash Flows

The following table summarizes the changes to our cash flows for the periods presented:


		Nine Months Ended				Three Months Ended
(amounts in thousands)	(amounts in thousands)	September 24, 2022		September 25, 2021			(amounts in thousands)	April 1, 2023		March 26, 2022
Cash provided by (used in):
Cash (used in) provided by:							Cash (used in) provided by:
Operating activities	Operating activities	$	(73,426)	$	135,284		Operating activities	$	(656)	$	(186,867)
Investing activities	Investing activities	(42,726)		(68,458)			Investing activities	(19,032)		(9,266)
Financing activities	Financing activities	(47,858)		(346,159)			Financing activities	(99)		71,283
Effect of changes in exchange rates on cash and cash equivalents	Effect of changes in exchange rates on cash and cash equivalents	(31,732)		(12,336)			Effect of changes in exchange rates on cash and cash equivalents	2,910		(4,940)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	$	(195,742)	$	(291,669)		Net change in cash and cash equivalents	$	(16,877)	$	(129,790)

Cash Flow from Operations

Net cash ~~(used in) provided by~~used in operating activities ~~changed $208.7~~improved $186.2 million to ~~$73.4~~$0.7 million ~~net cash used~~ in the ~~nine~~three months ended ~~September 24, 2022 from $135.3~~April 1, 2023 compared to $186.9 million ~~net cash provided~~ in the ~~nine~~three months ended ~~September 25, 2021.~~March 26, 2022. The ~~increase~~decrease in cash used in operating activities was primarily due ~~primarily~~ to ~~increased~~a $186.5 million improvement in net cash used by our working capital accounts (accounts receivable, net, inventory, and ~~decreased earnings~~accounts payable). Cash flow provided by Inventory was $93.1 million favorable compared to the three months ended March 26, 2022, primarily driven by demand planning that drove lower inventory days on hand, which mitigated inflation on raw materials. Cash flow used in Accounts receivable, net of $57.5 million was favorable in the ~~current period.~~three months ended April 1, 2023 compared to the three months ended March 26, 2022, which was primarily due to improved days sales outstanding, partially offset by an increase in sales. Cash flow provided by Accounts payable was $35.9 million favorable compared to the three months ended March 26, 2022, which was primarily due to inflation on purchases, partially offset by demand planning that drove moderated purchasing.

Cash Flow from Investing Activities

Net cash used in investing activities ~~decreased $25.7~~increased $9.8 million to ~~$42.7~~$19.0 million in the ~~nine~~three months ended ~~September 24, 2022 from $68.5~~April 1, 2023 compared to $9.3 million in the ~~nine~~three months ended ~~September 25, 2021~~March 26, 2022, primarily due to an increase in capital expenditures of $7.2 million, and a decrease in cash received from the recovery of cost from interest received on impaired notes of ~~$14.0~~$5.6 million, ~~and~~partially offset by cash received from insurance proceeds related to a ~~reduction in capital expenditures.~~property claim of $3.2 million.

Cash Flow from Financing Activities

Net cash used in financing activities ~~was $47.9~~decreased to a $0.1 million use of cash in the ~~nine~~three months ended ~~September 24,~~April 1, 2023 compared to a $71.3 million source of cash in the three months ended March 26, 2022, ~~and consisted~~ primarily due to a decrease in net borrowings of $110.6 million, partially offset by the non-recurrence of repurchases of our Common Stock of ~~$132.0~~$40.2 million ~~partially offset by net borrowings of $84.8 million.~~in the three months ended March 26, 2022.

4239

Net cash used in financing activities was $346.2 million in the nine months ended September 25, 2021 and consisted primarily of repurchases of our Common Stock of $278.0 million and net debt repayments of $72.2 million.

Critical Accounting Policies and Estimates

Our MD&A is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which may differ from these estimates.

Our significant accounting policies are described in Note 1 - Summary of Significant Accounting Policies to the consolidated financial statements presented in our 10-K. Our critical accounting policies and estimates are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Form 10-K. Our significant and critical accounting policies have not changed significantly since our Form 10-K was filed.

Holding Company Status

We are a holding company that conducts all of our operations through subsidiaries, and we rely on dividends or advances from our subsidiaries to fund the holding company. The majority of our operating income is derived from JWI, our main operating subsidiary. The ability of our subsidiaries to pay dividends to us is subject to applicable local law and may be limited due to the terms of other contractual arrangements, including our Credit Facilities, Senior Notes, and Senior Secured Notes.

The Australia Senior Secured Credit Facility also contains restrictions on dividends that limit the amount of cash that the obligors under these facilities can distribute to JWI. Obligors under the Australia Senior Secured Credit Facility may pay dividends only to the extent they do not exceed 80% of after tax net profits (with a one-year carryforward of unused amounts) and only while no default is continuing under such agreement. For further information regarding the Australia Senior Secured Credit Facility, see Note 9 - Long-Term Debt in our consolidated financial statements.

The amount of our consolidated net assets that were available to be distributed under our credit facilities as of ~~September 24, 2022~~April 1, 2023 was ~~$814.3~~$819.9 million.

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

We are exposed to various types of market risks, including the effects of adverse fluctuations in foreign currency exchange rates, ~~adverse~~ changes in interest rates, and ~~adverse~~ movements in commodity prices for products we use in our manufacturing. To reduce our exposure to these risks, we maintain risk management controls and policies to monitor these risks and take appropriate actions to attempt to mitigate such forms of market risk. Our market risks have not changed significantly from those disclosed in the Form 10-K.

Item 4 - Controls and Procedures

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), which are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, including this Report, are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Company under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer (“CEO”) and principal financial officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.

The Company’s management, including the Company’s CEO and CFO, conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Report and, based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of ~~September 24, 2022.~~April 1, 2023.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company’s most recently completed quarter ended ~~September 24, 2022~~April 1, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

~~PART II - OTHER INFORMATION~~

Item 1 - Legal Proceedings

Information relating to this item is included within Note 20 - Commitments and Contingenciesof our unaudited financial statements included elsewhere in this Form 10-Q.

Item 1A - Risk Factors

~~Except the~~There have been no updates to the risk factors ~~set forth below, there have been no material changes in our risk factors from those~~previously disclosed in our Annual Report on Form 10-K included in Part I Item 1A - Risk Factors for the year ended December 31, ~~2021.~~2022.

~~The ongoing conflict between Russia and Ukraine could have a material adverse effect on our business, financial condition, and results of operations.~~

In February 2022, the Russian military commenced an invasion of Ukraine, which is ongoing as of the date of this report. The impacts of the conflict, as well as sanctions imposed on Russia and economic and political uncertainty could have an adverse impact on our business. We do not have operations in Ukraine, and prior to the invasion, we held limited sales operations in Russia, which were discontinued in the first quarter of 2022. However, we have and may continue to experience heightened inflation on materials, freight, and other variable costs, such as utilities, primarily in our European operations. The risks to our business may include, among others, adverse impacts on our supply chain, including trade barriers or restrictions, transportation and operating disruptions, decreased customer demand, elevated inflation, cybersecurity incidents, unfavorable foreign exchange, and higher borrowing costs, any of which could have a material adverse impact on our business, financial condition, and results of operations.

~~Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds~~

~~(c) Issuer Purchases of Securities~~

~~A summary of our repurchases of Common Stock during the third quarter of 2022 is as follows (in thousands, except share and per share amounts)~~:

(a) (b) (c) (d)
Period Total Number of Shares (or Units) Purchased
Average Price Paid Per Share (or Unit) 1
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under The Plans or Programs 2
June 26, 2022 - July 23, 2022 1,641,084 $15.41 1,641,084 $1,184
July 24, 2022 - August 20, 2022 — $— — $200,000
August 21, 2022 - September 24, 2022 — $— — $200,000
Total 1,641,084 $15.41 1,641,084

1 ~~Average price paid per share includes costs associated with the repurchases.~~

2 In July 2021, our Board of Directors increased our existing repurchase authorization to a total of $400.0 million with no expiration date. On July 28, 2022, our Board of Directors authorized a new repurchase program, replacing our previous share repurchase authorization, with an aggregate value of $200.0 million and no expiration date.

Item 5 - Other Information

None.

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Item 6 - Exhibits

~~Exhibit No.~~

~~Exhibit Description~~

~~Form~~

~~File No.~~

~~Exhibit~~

~~Filing Date~~

~~10.1*+~~

~~Form of Separation Agreement between JELD-WEN Holding, Inc. and executive officers.~~

~~10.2*+~~

~~Amendment to Executive Employment Agreement between JELD-WEN, Holding, Inc. and Kevin C. Lilly, effective August 3, 2022.~~

~~10.3+~~

~~Form of Executive Employment Agreement between JELD-WEN Holding, Inc. and executive officers.~~

~~10-K~~

~~001-38000~~

~~10.24~~

~~February 22, 2022~~

31.1*

~~Certification of Principal Executive Officer Pursuant to Rule 13a-14(a).~~

31.2*

~~Certification of Principal Financial Officer Pursuant to Rule 13a-14(a).~~

32.1*

~~Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.~~

101.INS*

~~XBRL Instance Document-the instance document does not appear in this Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.~~

101.SCH*

~~Inline XBRL Taxonomy Extension Schema Document.~~

101.CAL*

~~Inline XBRL Taxonomy Extension Calculation Linkbase Document.~~

101.DEF*

~~Inline XBRL Taxonomy Extension Definition Linkbase Document.~~

101.LAB*

~~Inline XBRL Taxonomy Extension Label Linkbase Document.~~

101.PRE*

~~Inline XBRL Taxonomy Extension Presentation Linkbase Document.~~

104*

~~Cover page Interactive Data file (formatted as Inline XBRL and contained in Exhibit 101).~~

~~Filed herewith~~

~~Indicates management contract or compensatory plan~~

Exhibit No.

Exhibit Description

Form

File No.

Exhibit

Filing Date

3.1

Second Amended and Restated Certificate of Incorporation of JELD-WEN Holding, Inc.

8-K

001-38000

3.1

May 4, 2022

3.2

Third Amended and Restated Bylaws of JELD-WEN Holding, Inc.

8-K

001-38000

3.2

May 4, 2022

31.1*

Certification of Principal Executive Officer Pursuant to Rule 13a-14(a).

31.2*

Certification of Principal Financial Officer Pursuant to Rule 13a-14(a).

32.1*

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.

101.INS*

XBRL Instance Document-the instance document does not appear in this Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*

Inline XBRL Taxonomy Extension Schema Document.

101.CAL*

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104*

Cover page Interactive Data file (formatted as Inline XBRL and contained in Exhibit 101).

Filed herewith

4541

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


JELD-WEN HOLDING, INC.
(Registrant)

By:			/s/ Julie Albrecht
			Julie Albrecht
			Executive Vice President and Chief Financial Officer

Date: ~~October 31, 2022~~May 9, 2023

4642


	(a)	(b)	(c)	(d)
Period	Total Number of Shares (or Units) Purchased	Average Price Paid Per Share (or Unit) 1	Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under The Plans or Programs 2
June 26, 2022 - July 23, 2022	1,641,084	$15.41	1,641,084	$1,184
July 24, 2022 - August 20, 2022	—	$—	—	$200,000
August 21, 2022 - September 24, 2022	—	$—	—	$200,000


Total	1,641,084	$15.41	1,641,084