Employee Benefit Plans

12 Months Ended

Dec. 31, 2024

Employee Benefit Plans

Employee Benefit Plans

(15) Employee Benefit Plans

The Company’s U.S. employees are eligible to participate in the Company’s 401(k) savings plan. The Company provides a base contribution of 2% of an employee’s salary, regardless of whether the employee elects to contribute to the plan. Further, the Company matches 100% of employee contributions of up to the first 4% of eligible compensation. The Company’s match contributions for the years ended December 31, 2024, 2023 and 2022, were $8.5 million, $8.1 million and $7.6 million, respectively. Charges for Europe pension plans approximated $4.0 million, $3.3 million and $4.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. These costs relate to plans administered by certain European subsidiaries, with benefits calculated according to government requirements and paid out to employees upon retirement or change of employment.

With the acquisition of Bradley on October 23, 2023, the Company acquired the defined benefit retirement plan (the “Pension Plan”) of Bradley. The Pension Plan was frozen effective September 30, 2011, and the Pension Plan pension benefit obligation (“PBO”) was close to fully funded prior to the acquisition date. The Company terminated the Pension Plan with a plan termination effective date of December 31, 2023. As a result of the plan termination, and similar to the acquisition opening balance sheet liability, the December 31, 2023 balance sheet liability was calculated on a termination basis by valuing the PBO on a going concern basis using the Pension Plan cash flows and a spot curve as of December 31, 2023 conditions, for assumed lump sum election rates, lump sum cost, and insurer premium.

In September 2024, the Company settled its Pension Plan benefit obligations which included the following actions:

● Purchased a non-participating annuity contract for $50.0 million from an insurance company for all retirees and participants that chose annuities as a payment option under the Pension Plan and transferred the related Pension Plan assets and benefit obligations to the insurance company. The payment under the contract to the insurance company was considered an irrevocable action and the settlement was binding.

● Distributed lump sum payments of $14.5 million to participants that chose the lump sum payment option. The lump sum payments paid to participants represented the actuarial equivalent value of the participants’ remaining accrued benefits under the Pension Plan as of the distribution date, calculated in accordance with the terms of the plan and based on the participants’ ages on the distribution date.

The settlement resulted in a reduction to the projected benefit obligation and a corresponding decrease to plan assets. This transfer of the benefit obligation triggered settlement accounting which required immediate recognition of the cumulative actuarial gains of $0.9 million that were previously recorded in accumulated other comprehensive loss, which were recognized in selling, general and administrative expenses for the year ended December 31, 2024. The associated deferred tax liability of $0.2 million that was previously recorded in accumulated other comprehensive loss and recorded within long term deferred tax liabilities was reversed in the quarter ended September 29, 2024. Pension Plan assets exceeded the benefit obligations at the date of settlement, which resulted in the Company recognizing a surplus asset and a non-cash settlement pre-tax gain of $7.8 million in the third quarter of 2024. The gain was included in selling, general and administrative expenses in the Company’s consolidated statement of operations. The surplus plan asset was recognized in prepaid expenses and other current assets and is expected to be settled in cash in the next twenty-four months after the requirements to distribute surplus assets are met in 2025.

The funded status of the defined benefit plans and amounts recognized in the consolidated balance sheets are as follows:

	Year Ended		Year Ended
	December 31, 2024		December 31, 2023
	(in millions)
Change in projected benefit obligation
Balance at beginning of period	$	73.5	$	68.0
Service cost		—		—
Administration costs paid		—		—
Interest cost		1.9		0.7
Actuarial loss (gain)		(6.3)		5.5
Annuity benefits paid		(4.1)		(0.7)
Lump sum benefits paid		(15.0)		—
Annuity sale to insurer		(50.0)		—
Balance at end of year	$	—	$	73.5
Change in fair value of plan assets
Balance at beginning of period	$	74.4	$	67.9
Actual gain (loss) on plan assets		2.5		7.2
Employer contributions		—		—
Administration costs paid		—		—
Annuity benefits paid		(4.1)		(0.7)
Lump sum settlement benefits paid		(15.0)		—
Annuity settlement sale to insurer		(50.0)		—
Transfer surplus assets		(7.8)		—
Fair value of plan assets at end of the year	$	—	$	74.4
Funded (underfunded) status at end of year	$	—	$	0.9

Amounts recognized in the consolidated balance sheets are as follows:

	December 31, 2024		December 31, 2023
	(in millions)
Current liabilities	$	—	$	—
Noncurrent assets (liabilities)		—		0.9
Net amount recognized	$	—	$	0.9

Amounts recognized in accumulated other comprehensive loss consist of:

	December 31, 2024		December 31, 2023
	(in millions)
Net actuarial gain recognized	$	(6.9)	$	(0.9)
Settlement gain		7.8		—
Change in period	$	0.9	$	(0.9)

The components of net periodic benefit income are as follows:

	Year Ended		Year Ended
	December 31, 2024		December 31, 2023
	(in millions)
Service cost - benefits earned	$	—	$	—
Interest costs on benefit obligation		1.9		0.7
Expected return on plan assets		(2.0)		(0.7)
Settlement gain	$	(7.8)	$	—
Net periodic benefit income	$	(7.9)	$	—

Assumptions

Weighted-average assumptions used to determine benefit obligations:

	December 31, 2024		December 31, 2023
	(in millions)
Discount rate	N/A	%	4.64	%

Weighted-average assumptions used to determine net periodic benefit costs:

	December 31, 2024		December 31, 2023
	(in millions)
Discount rate	4.64	%	5.36	%
Long-term rate of return on plan assets	4.64	%	5.60	%

Discount rates were selected based upon rates of return assuming a plan termination basis as of December 31, 2023. The discount rate selected was the equivalent rate for the estimated settlement liability. In selecting the expected long-term rate of return on plan assets, the Company considers the average rate of earnings expected on the funds invested or to be invested to provide for the benefits of this plan. This includes considering the trust’s asset allocation and the expected returns likely to be earned over the life of the plan.

Plan assets

The Company’s investment policies employed an approach at the end of fiscal year 2023 to better match the asset allocation to the liability duration due to the asset and liability transfer and plan settlement later in fiscal year 2024. A mix of cash and fixed income investments were used to align to the expected liability settlement and equity investments were no longer part of the portfolio. Fixed income investments consist of domestic and international corporate notes, federal and state treasury notes, and money market funds. Investment and market risk are measured and monitored on an going basis.

The weighted average plan asset allocations by asset category at December 31, 2023 were as follows:

Asset Category
Cash	39	%
Equity	-
Fixed Income	61
Total	100	%

The following tables present the investments in the Pension Plan measured at fair value at December 31, 2023:

	December 31, 2023
	Level 1		Level 2		Level 3		Total
	(in millions)
Cash	$	28.9	$	—	$	—	$	28.9
Fixed income securities
Corporate notes		—		31.7		—		31.7
Treasury notes		12.7		—		—		12.7
Other investments(a)		1.7		—		—		1.7
Total investments	$	43.3	$	31.7	$	—	$	75.0

(a) Includes Aetna Co. Annuity Contract and accrued interest and dividends

Cash flows

The information related to the Company’s pension funds cash flow is as follows:

	Year Ended		Year Ended
	December 31, 2024		December 31, 2023
	(in millions)
Employer contributions	$	—	$	—
Benefit payments		4.1		0.7
Lump sum settlement benefits paid		15.0		—
Annuity settlement sale to insurer		50.0		—